Nearly 30% of all crypto traced from illicit addresses since 2019 ended up at sanctioned services like Russiaβs crypto exchange Garantex, according to Chainalysis.
Cryptocurrency exchanges have received nearly $100 billion worth of crypto from well-known illicit addresses since 2019. This highlights a growing lack of international cooperation on anti-money laundering measures.
According to blockchain forensic firm Chainalysis, nearly 30% of all crypto from illicit addresses eventually ended up at sanctioned services such as Russiaβs crypto exchange Garantex. The highest amount was recorded in 2022 when $30 billion of identified βdirty cryptoβ interacted with sanctioned services.
The data includes only the totals moved from illicit sources to crypto exchange services. Chainalysis points out that it doesnβt include the value βsent and received among intermediaries,β which can involve βtens or hundreds of individual transactions.β
The New York-headquartered firm says an βincreasing portionβ of illicit funds passing through intermediary wallets is concentrated not in traditional crypto like Bitcoin (BTC) or Ethereum (ETH), but in stablecoins, which now account for βthe majority of all illicit transaction volume.β
Despite the rise of stablecoin usage, their issuers have the ability to freeze funds. Tether, the largest stablecoin issuer, has frozen an estimated 1,600 addresses holding funds worth approximately $1.5 billion worth of USDT, Chainalysis revealed. The amount of assets frozen in other stablecoins isnβt specified.
Stablecoins have become a popular tool for sanction evaders looking to bypass restrictions.
In late May, it was reported that Russiaβs two largest unsanctioned metal producers started using Tetherβs USDT stablecoin for cross-border transactions with Chinese clients and suppliers. This came after the U.S. Treasury Department made it clear it would impose secondary sanctions on lenders facilitating sanctions evasion.
That development came shortly after Venezuelaβs state-run oil company PDVSA increased its use of USDT in crude and fuel exports amid tightening U.S. sanctions. Venezuelan oil minister Pedro Tellechea noted at the time that the country uses βdifferent currencies, according to what is stated in contracts,β with some contracts preferring cryptocurrency as a payment method.
Following Tellecheaβs statement, Tether publicly reiterated its commitment to adhere to the OFAC SDN list and announced plans to ensure sanctioned addresses are promptly frozen.
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