According to a newly released chainalysis blog post, contrary to popular opinion, organized crime groups have adopted cryptocurrency because they think it is better, fast and the understanding that gives them anonymity. However, they have limited intent or expertise for any sophisticated obfuscation of their financial paths.
One of the biggest factors of criminal groups has made the use of crypto is that it allows rapid, infinite payment, allowing their networks to move funds worldwide without delays or risks linked to traditional banking systems.
Why are criminal groups really using crypto
Mexican cartels are one of the criminal groups there that continues to take advantage of the benefits of crypto. They observed using crypto to pay Chinese suppliers for fentanyl precursors, capitalizing on low transaction fees and instant transfers.
Many of these criminals operate on the common belief that crypto facilitates the undeniable financial anonymous. This is really a misconception, because every single action, accidentally obfuscated, which occurs in the blockchain is available to anyone who knows to see.
In particular, the wrong Kuru -tackle is driving adoption, especially in groups such as cartels and wildlife traffickers that have often been reported to be used without advanced privacy tools.
The fact that so many of these evil actors have been using crypto in recent times proves that they have been using it more because it has not been restrained by boundaries and simplify financial operations for illicit activities, rather than because they think it provides anonymity.
According to ReportThis is why organized crime capitalizing in crypto is often non -sophisticated. Compared to state -supported criminals such as North Korea hackers who use advanced obfuscation methods such as mixers or privacy coin eg Monero, traditional organized crime groups will only go to their business without covering their tracks.
These criminals often use regulated exchanges for cash-outs, a gesture that exposes their funds to platforms that comply with KYC. Good examples are cartel-associated launderers that move fentanyl through CEX accounts, leaving clear chain lanes.
It has also been noted that most groups stick to widely available cryptocurrencies such as Bitcoin or Stablecoins, which choose to prevent privacy coins due to how complicated they are doing or limited liquidity.
The main focus is always on scale operations rather than avoiding discovery because the infinite crypto nature allows them to reach their global customer bases.
This is really good news for law enforcement
The stunning use of crypto by organized crime groups for bad purposes, because they do not try to hide, creating different opportunities for law enforcement.
As previously said, almost every action that occurs in the blockchain can be monitored as it acts like an unchanged ledger. This means that investigators can monitor real-time transactions and map criminal networks on boundaries, something that can be impossible to do with traditional banking.
The fact that criminals also rely on CEXs, who comply with KYC/AML regulations, can also help authorities identify and freeze assets as well as gather off-chain intelligence. A good example of this is when Ledger's co-founder is seized and investigators are able to monitor almost all ransom funds and occupy them.
Unfortunately, as the blockchain offers avenues to monitor transactions, law enforcement faces challenges due to their limited blockchain expertise, as crypto has yet to go to the main.
While training will help more officials identify case overlays, greater adoption is required to properly achieve transparency crypto offers.
Mastering blockchain analysis will also encourage and assist proactive monitoring, which will allow law enforcement to interrupt criminal networks before their crimes increase. It is important that this occurs quickly because criminals may begin to use more sophisticated methods before cracking efforts are coordinated enough.
Cryptopolitan Academy: Tired of market swings? Learn how the Defi can help you develop a steady passive income. Register now
