According to CoinDesk, traditional money launderers are increasingly using crypto networks to move illicit funds. A recent report by analytics company Chainalysis highlights the growing trend of on-chain money transfers that, while not definitively illegal, exhibit characteristics that would raise concerns in traditional banking systems.
Chainalysis' Head of Research, Kim Grauer, explained that these transactions are part of a large-scale money laundering infrastructure designed to clean cash originating outside the crypto world. Unlike the crypto scams, thefts, and ransomware attacks that Chainalysis typically monitors, these transactions come from wallets not known to be illicit. However, they follow patterns that would likely be flagged by traditional financial compliance departments, such as splitting funds into amounts just below know-your-customer (KYC) reporting thresholds and then recombining them later.
The July report marks Chainalysis' first comprehensive attempt to document the scale of this trend across the blockchain. The findings revealed that these transactions are significantly larger in volume than the known illicit transaction base. For instance, a notable number of transactions valued just below the $10,000 mark—where additional KYC rules apply—were observed when analyzing all transfers sent to exchanges in 2024.
Grauer noted that while a transaction just below the $10,000 threshold isn't definitively illicit, traditional financial institutions have long used such heuristics to track down criminal activity. She emphasized that investigators consider multiple factors when determining whether a transaction is suspicious, and this is just one of many indicators.
More concerning are transactions that flow to over-the-counter brokers who openly advertise their willingness to convert criminal crypto into dollars without asking questions. Grauer stated that the goal is to advance the conversation about compliance techniques in the crypto industry to mirror those developed in traditional banking.