Crypto mixers have been said to be the perfect way of protecting the identity of an individual user by privacy advocates. Yet as per a recent report, it gained popularity among cybercriminals and nation-states. According to Chainalysis, the Blockchain analytics firm, crypto mixers’ users doubled in 2022 with illegal transactions being the leading contributor. Also log on to Pattern Trader for crypto trading, an official website that simplified trading.
Mixers are never inherently bad for cryptocurrency
Note that crypto mixers are totally in large with one of the main principles of the cryptocurrency market which is anonymity. A lot of people who make use of mixers simply use them in one attempt of maintaining their privacy or getting around legislation in the home country to prohibit or hinder their own asset’s use.
Unfortunately, a current report by Chainalysis showed that the funds’ percentage originating from some cybercriminals and different bad actors has hit one all-time price high this year, followed by the increase throughout last year.
The maximum volume to pass via crypto mixers reached this year in April. It was $51.8 million priced cryptos. It is double the volume that was recorded last year in April. But to be fair the month of April presented a little slump in overall volume.
Mixers have been known to hide the traces of transactions making both receiver and sender anonymous. The report of Chainalysis disclosed that the moving average of 30-day of the overall everyday value recorded an all-time price high of $51.8 million in the month of April across cryptocurrency mixers.
The report said that illegal addresses account for 23 per cent of funds that were sent to mixers till now this year up from last year’s 12 per cent. It is double that of the incoming recorded volume in a similar period last year. It has been seen that the funds that went to mixers mainly come from Darknet markets, DeFi protocols, hackers, centralized exchanges along with addresses connected to illegal activities that are linked to some sanctioned countries.
The report also disclosed that out of every fund sent from illegal addresses, only 10 per cent were sent exclusively to cryptocurrency mixers. One compelling observation from this year’s second quarter is that funds sent from illegal addresses came from some stolen funds or fraud shops. There were many arguments around cryptocurrency mixers with the sanctioning of Blender.io by the US. It has been part of the infamous hack of Axie Infinity. It saw a $620 million loss in cryptos. Tornadeo Cash another cryptocurrency mixer open-sourced its code of user interfaces to become completely transparent and decentralized.
Sanctioned entities represent the market’s sizeable portion
Sanctioned entities are known as cybercrime syndicates recognized as well as sanctioned by global authorities like Hydra Market or the Lazarus Group of North Korea. They are allegedly the Harmony bridge exploit’s masterminds apart from other attacks.
This year the percentage of funds that are associated with some sanctioned entities reached an increasing 23 per cent of funds that passed via mixing services. It nearly doubled the figure to 12 per cent last year. Among this number 50.4 per cent are associated with Hydra Marketplace. It is a dark market that is Russia based and was shut down in April by the German authorities. A more 30 per cent are associated with the Lazarus Group and then 18.8 per cent with Blender.io. The rest 0.8 per cent are associated with many small-time cybercrime firms.
Although mixers represent one vital part of the ecosystem of blockchain, aiding to offer anonymity for cryptocurrency users who may not wish to make use of privacy coins, their popularity among cybercriminals can never get overlooked. They present one complicated issue for some regulators who are in search to pause cybercrime and not hurt legal users who enjoy all privacy associated with such activities.
Conclusion
It is vital to note that currently, crypto mixers are not illegal. Yet regulators could take another glance at this area. The National Crime Agency of the UK in March hinted that it is looking to regulate coin mixers for ensuring that they comply with their laws of anti-money laundering. Chainalysis admitted that there are many great reasons for using mixers mainly under one oppressive government or a jurisdiction that is crypto-unfriendly. Yet core functionality of mixers along with the fact they rarely will ask for KYC information naturally makes them alluring to cybercriminals.
