Cryptocurrency Mixer Transactions Are on the Rise. Why?

On-chain analysis reports show that the average total value received by cryptocurrency mixers has risen significantly in the second quarter of 2022. This value reaches an all-time-high. What could this mean?

Value received from illicit transactions to cryptocurrency mixers is high

Chainanalysis, the blockchain data platform that provides secure data to the public to guide their activities with cryptocurrencies, just released a report on their analysis of cryptocurrency mixers. The data shows that the 30-day moving average of total value received by mixers from the first quarter of 2021 to the second quarter of 2022 has increased, reaching an all-time-high of $51.8 million.

‘While value received by mixers fluctuates significantly day-to-day, the 30-day moving average reached an all-time high of $51.8 million worth of cryptocurrency on April 19, 2022, roughly doubling incoming volumes at the same point in 2021.’ The report stated

The same way cryptocurrencies were not created to be used for negative purposes, yet there are people who use them for that purpose, cryptocurrency mixers were not created to be used for illicit transactions either. However, the data shows that mixers are receiving more cryptocurrency volume in the year 2022 than before, and the share shows that amongst different platforms like defi protocols, centralized exchanges, gambling platforms, etc., more volumes come from illicit platforms or sources. Illicit addresses account for 23% of funds sent to mixers so far in 2022, up from 12% in 2021.

What is more shocking, according to the report, is the fact that there is a huge volume of funds moving to mixers from addresses associated with sanctioned entities, especially in Q2 2022. The total volume from illicit sources consists of accounts from Hydra Marketplace, Lazarus Group, Blender.io, and others. Each constitutes 50.4%, 30%, 18.8%, and 0.8%, respectively. 

The account with the highest share, Hydra Marketplace, is a Russian darknet market that was sanctioned in April 2022. This account was sanctioned for being involved in laundering funds from other darknets, cryptocurrency thefts, and ransomware attacks. 

From Lazarus Group and Blender.io, the analysis pointed out that larger portions of accounts from these groups are associated with the North Korean government. The Lazarus Group is a cybercrime syndicate responsible for several cryptocurrency hacks on behalf of the North Korean government, and along with associated groups, remains extremely active today. Blender.io, on the other hand, became the first ever mixer sanctioned this year for its role in laundering funds stolen by the Lazarus Group and others associated with North Korea.

The report noted that “Funds sent to mixers by cybercriminal groups associated with Russia, and especially those associated with North Korea, have risen dramatically in 2021 and 2022.”