Chainalysis Identifies Misuse of Virtual Asset Services

Threat Actors are Using Mixers and Exchanges to Launder Money

Cybersecurity firm Chainalysis has released a report claiming that virtual asset services like mixers and exchanges are being heavily misused by threat actors to launder money. According to the report, these cybercriminals use these platforms to obscure the origins of their funds and prevent law enforcement from tracking down their illegal activities.

The Problem of Mixers

The report indicates that mixers are the most commonly used service for money laundering among these criminals. Mixers are anonymization services that erase the link between the sender and the receiver of virtual assets by blending funds from multiple users and then redistributing them. This way, the authorities cannot trace the movement of specific funds.

The Problem of Exchanges

Furthermore, cybercriminals also exploit virtual asset exchanges. Some exchanges do not collect enough know-your-customer (KYC) information or perform anti-money laundering (AML) checks, becoming the perfect place to trade, convert and cash out illicitly obtained virtual assets.

The Solution

Chainalysis recommends that virtual asset service providers should perform KYC/AML protocols to help reduce illicit activities on their platforms. As a solution to the misuse of these services, Chainalysis suggests creating tools to trace transaction paths and identify suspicious activities.

Summary

Virtual asset services such as mixers and exchanges are being exploited by cybercriminals to launder money and obscure the origins of illicit funds. Chainalysis has suggested that virtual asset service providers invest in KYC/AML protocols and develop tools to trace the transaction path of virtual assets in order to curb these illegal activities.

Original Article: https://www.infosecurity-magazine.com/news/cybercriminals-mining-pools/