"Cryptocurrency 'Mixers' See Record Transactions From Sanctioned Actors"

Security researchers at Chainalysis have discovered that the use of so-called cryptocurrency “mixers,” which combine various types of assets to mask their origin, peaked at a 30-day average of nearly $52 million worth of digital currency in April, representing an unprecedented volume of funds moving through those services.  The researchers noted that a near two-fold increase in funds sent from illicit addresses has accelerated the increase, indicating that the technology that can obfuscate the currency continues to be highly attractive to cybercriminals.  Cryptocurrency mixers work by taking an individual’s cryptocurrency and combining it with a larger pool before returning units equivalent to the original amount minus a service fee to the original account.  Doing this makes it harder for law enforcement and cryptocurrency analysts to trace the currency.  The researchers noted that mixers aren’t solely used by criminals, but they are extremely popular with them.  Chainalysis found that 10% of all funds from illicit wallets are sent to mixers, while mixers received less than .5% of the share of other sources of funds tracked by the firm, including decentralized finance projects.  The researchers found that the bulk of illicit funds transferred to mixers came from sanctioned actors, primarily Russian dark net market Hydra and, more recently, the Lazarus Group, a group of North Korean state-backed hackers.  Financial regulators have taken note, and in May, the Treasury Department sanctioned popular mixer Blender.io for processing $20.5 million of the $620 million the Lazarus group stole from the Axie Infinity project.  The researchers noted that an increase in transfers from Decentralized Finance (DeFi) projects also contributed to the increased use of mixers.  State-backed actors have also been known to use DeFi projects as a laundering tool.  The researchers and the Treasury department are careful to note that there are legitimate uses for mixers, such as anonymity from an oppressive government.  However, because most don’t follow U.S. regulations requiring that exchanges know who their customers are, it’s easier for criminals to exploit them.  The researchers noted that mixers come with one serious weakness, however.  The more criminals pump in funds, the more easily their mixer usage can be tracked.  That means that hackers are limited in what they can launder before raising suspicion. 

CyberScoop reports: "Cryptocurrency 'Mixers' See Record Transactions From Sanctioned Actors"