At
least 13% of all criminal proceeds in bitcoin passed through
privacy wallets - which make it harder to track cryptocurrency
transactions - in 2020, up from 2% in 2019, according to a study
by the digital currency forensics firm.
While cryptocurrency transactions are pseudonymous, they are
recorded on a public ledger called blockchain which makes it
easier to track fund flows. Over the past decade, law
enforcement has become better at tracking illicit activity on
blockchains.
But privacy wallets, of which there are several types, combine,
mix and anonymise cryptocurrency transactions, making it
complicated to follow a money trail.
"It makes it practically impossible to track funds, especially
if you do a series of transactions through privacy wallets,"
said Dr Tom Robinson, chief scientist at Elliptic. "This is a
big challenge for law enforcement. It means they are probably at
a dead end."
Much of the $120,000 in bitcoin raised in a hack of famous
Twitter users' accounts in July went through a privacy wallet,
as did part of the $280 million in crypto assets stolen from
Asian exchange KuCoin in September, Elliptic found.
The study also describes uses of decentralised exchanges -
platforms that are not run by a specific company - to launder
funds.
While the total volume of illicit activity in crypto assets has
grown in absolute terms over the years, it accounts for less
than 1% of all digital transactions, down from 35% in 2012,
according to Elliptic.
(Reporting by Anna Irrera; editing by John Stonestreet)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|