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Crypto Criminals Embrace Bitcoin Mixers, Laundering Over $300 Million in 2023

Key Takeaways

  • CertiK uncovers a significant shift as over $300 million in stolen funds from major crypto breaches in 2023 find their way into the Bitcoin network;
  • Bitcoin mixers, such as Sinbad, have emerged as the preferred choice for money laundering, especially after Tornado Cash faced sanctions;
  • As cyber criminals adapt, there's an urgent need for dynamic countermeasures to combat blockchain-based financial crime effectively.
Crypto Criminals Embrace Bitcoin Mixers, Laundering Over $300 Million in 2023

Blockchain security firm CertiK has uncovered that over $300 million in stolen funds from 50 major crypto breaches in 2023 have made their way into the Bitcoin network, signaling a shift in tactics among cyber criminals.

The decentralized nature of Bitcoin, which allows users to transact without the risk of censorship, also provides a cloak of anonymity for malicious actors seeking to move illicitly acquired assets.

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Historically, Tornado Cash had been the go-to choice for hackers aiming to obfuscate the origins of their gains obtained through illicit means. However, after facing sanctions from the United States Treasury Department's Office of Foreign Assets Control (OFAC) in 2022, Tornado Cash has lost its appeal.

Instead, Bitcoin mixers have emerged as a preferred choice for money launderers in 2023. These mixers, like Sinbad, for example, have been widely used by the ill-famed hacker group Lazarus.

The advantage of Bitcoin mixers lies in their distinct approach to transaction anonymization. Unlike Tornado Cash, which simply severs the link between sender and receiver, these mixers allow users to deposit Bitcoin and distribute it across multiple wallets in varying amounts.

As the head of CertiK's rapid response team, Joe Green stated:

The Bitcoin ecosystem hosts a variety of privacy mixers that serve both privacy-conscious users and those with nefarious intentions.

So, while Tornado Cash continues to be favored for smaller-scale cybercrimes, CertiK has noted a significant shift towards Bitcoin-based laundering solutions in cases involving $50 million or more. This trend may well shape the future of cryptocurrency-related financial crimes.

As cybercriminals evolve their tactics, there is an urgent need for dynamic countermeasures to combat blockchain-based financial crime effectively.

Joe Green suggests that comprehensive tracing of the movement of illicit funds, coupled with information sharing with relevant parties such as exchanges, is crucial in addressing this issue.

Additionally, Green emphasizes the importance of stakeholders within the cryptocurrency space remaining vigilant and informed about criminal tactics. This knowledge will play a pivotal role in the ongoing fight against financial crimes in the crypto world.

Ain N., Lead Content Researcher
Ain is the Lead Content Researcher. Her vast experience with crypto and blockchain tech-related content allows her to identify the key pieces of information that should be presented to the learner, and ensure the validity of the gathered data.
With a degree in New Media studies, she has developed an extensive list of techniques to educate people via new, research-proven study models based on deduction and long-term human memory.
Ain approaches everything with unequivocal attention to detail. Her main goals are to erase the ambiguity surrounding many Web3 concepts, and to guide content writers in presenting difficult crypto-related concepts in an easy-to-understand manner.
Even though content strategy is her main passion, Ain also enjoys reading high-fantasy books and watching superhero movies.

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