The cat-and-mouse game of crypto money laundering

“It’s like a mole between law enforcement and the tools they use, and the criminals.”

However, these types of coins are still far from Bitcoin’s level of popularity. FinCEN said in October that it observed attackers providing both a Monero and Bitcoin wallet address for ransomware payments, and imposing an additional fee — a 10-20% surcharge — on victims paying in Bitcoin. Other times, attackers would exclusively request payment in Monero, but eventually accept payment in Bitcoin after negotiation. Overall, FinCEN said in a report that it observed 17 ransomware incidents where attackers demanded payment in Monero.

“While Bitcoin is still used in the majority of payments, a few ransomware strains have now added Monero,” Koven said. “But Monero’s liquidity is not conducive to large payouts, and it is also difficult to provide advice to victims. [to pay with Monero]. This is why we still consider Bitcoin to be predominant.

Cybercriminals also rely on cryptocurrency mixers, which are services that, for a fee, aggregate streams of cryptocurrency deposits from several different users and then return them to random values. These mixer services (also known as cups) are legal and offer users more anonymity. CoinJoins, another technique, involve mixing coins from different parties in a Bitcoin transaction, with the output mixing addresses to make tracking more difficult. And a process known as chain hopping involves converting cryptocurrency and moving funds across blockchains, all in quick succession, in ways that have traditionally been difficult to track.

“It’s like a clash between law enforcement and the tools they use, and the criminals,” Redbord said. “You see money launderers using increasingly sophisticated techniques to move money around crypto. There are so many of these types of techniques that bad actors are using today, and they are also profiting from these exchanges non-compliant.

However, he said, as malicious actors become more efficient, so too do the tools law enforcement uses to protect against these threats, allowing them to trace funds and link suspicious activity to real-world entities, as well as monitor transactions. for crypto assets to weed out those potentially linked to malicious actors.