According to CoinDesk, Chainalysis' latest report shows that traditional money launderers are beginning to use encryption networks to launder money on a large scale. These funds do not come from encryption fraud, theft or ransomware attacks, but from traditional criminal activities.

Kim Grauer, head of research at Chainalysis, said these transactions came from wallets that were not considered illegal, but their movement patterns and strategies would attract the attention of traditional financial compliance departments, such as splitting funds into amounts just below the KYC reporting threshold and then combining them.

Chainalysis found that a large number of transfers sent to exchanges in 2024 were just below the $10,000 threshold. While this is not necessarily illegal, traditional financial institutions have long used similar heuristics to track criminal activity.

Grauer said the report was Chainalysis’ first attempt to document the scale of the trend, which it found to be much larger than known illicit transactions.