Those who acquire Bitcoin illegally seek to hide their trail quickly. Thieves and scammers are increasingly avoiding exchanges that verify the identity of their users.
Thieves, scammers, and hackers who obtain funds in Bitcoin (BTC) illegally have increasingly less time on their hands. In 2015, these people could keep the bitcoins that they received for these activities for up to a year. A study by Crystal Blockchain reveals that they now do not even wait a month.
According to the research, “crypto criminals attempted to withdraw the assets that they fraudulently acquired 13 times faster than five years ago.”
The growing popularity of cryptocurrencies led criminals to accelerate the rate at which they dispose of their bitcoins. Various organizations have this type of crime under scrutiny to a greater extent. Besides, there is currently a growing number of tools for tracking cryptocurrency transactions.
Reduction in the Time for Holding the Stolen Bitcoin Funds
Cybercriminals have reduced the time in which they hold their Bitcoin funds. However, the research mentions another growing trend that is also on the rise: criminals choose to make a greater number of moves. In other words, they use intermediary addresses to move their funds, thereby seeking to hide the trail of stolen money.
According to the researchers, these criminals “tend to use additional transactions with unknown intermediate addresses. They do this before attempting to interact with an exchange, in an obvious attempt to obfuscate the stolen funds. “
KuCoin, a centralized exchange, managed to recover all of the funds stolen from its platform (around USD 285 million). This would be much more difficult on a decentralized platform, thus justifying the increasing use of decentralized exchanges to hide the trail of stolen funds.
These types of fraudulent moves that seek to hide the trail include the growing popularity of coin-mixing tools. Most of the funds go to exchanges that do not verify personal data or comply with anti-money laundering (AML) or know-your-customer (KYC) regulations very poorly.
The Number of Illegal Bitcoins is Less Common
According to the Crystal Blockchain report, the mechanisms for laundering funds that come from crime will become increasingly complex. The researchers explain that the number of existing tracking services has gone through a process of refining over time.
Apart from Crystal Blockchain, the ecosystem of blockchain trackers is becoming increasingly big. Providers like Chainalysisis and Elliptic pay attention to cryptocurrencies that focus on privacy, like Zcash.
The effort to perfect the techniques to launder Bitcoin that comes from crime is clear. However, studies by firms such as Chainalysis indicate that less than 1% of the value of Bitcoin moved is connected to criminal activities.
Tools for tracking and studying blockchain movements are essential to make the industry “as secure as possible.” The Crystal Blockchain study has already considered that the lack of proper tools facilitates Bitcoin scams. In other words, they suggest that it is necessary to incorporate these types of tools on decentralized exchanges.
By Alexander Salazar