Over $300 Million in Stolen Crypto Migrate to Bitcoin Mixers in 2023
CertiK's data reveals a significant move of ill-gotten gains into Bitcoin as cybercriminals seek alternative channels amid increased scrutiny on Tornado Cash.
Bitcoin, known for its decentralized nature providing freedom in asset transfers, is witnessing a darker side as malicious actors exploit its inherent privacy features to move stolen funds. A recent analysis by blockchain security firm CertiK sheds light on a significant shift in laundering tactics among cybercriminals in 2023.
Before facing sanctions from the United States Treasury Department’s Office of Foreign Assets Control (OFAC) in 2022, Tornado Cash stood out as the go-to choice for hackers looking to launder stolen crypto. OFAC reported over $7 billion in crypto assets laundered through the mixer since 2019. However, CertiK's latest findings suggest a noteworthy change in the landscape.
CertiK's data analysis reveals that over $300 million from the proceeds of 50 major exploits in 2023 found their way into Bitcoin, indicating a strategic shift by hackers seeking alternative avenues due to increased regulatory scrutiny on Tornado Cash.
Crypto mixers, designed to ensure privacy in transactions, play a crucial role in anonymizing funds by blending them with larger sums. Joe Green, Head of CertiK's quick response team, emphasized that while Bitcoin's decentralization and privacy benefit legitimate users, it also becomes a tool for malicious actors. Green stated:
“The Bitcoin ecosystem hosts a variety of privacy mixers that serve both privacy-conscious users and those with nefarious intentions. [...] While this scenario presents a challenge, it’s important to recognize it as an intrinsic aspect of decentralized systems.”
The transition to Bitcoin mixers, such as the now-sanctioned Sinbad, which was shut down by U.S. authorities, emerges as the preferred choice for infamous hacker group Lazarus in 2023, as per CertiK's analysis.
Distinguishing Bitcoin mixers from their Tornado Cash counterparts, CertiK explained that the former allows users to deposit Bitcoin, distributing it across multiple wallets with varying percentages, complicating tracking efforts compared to the fixed withdrawal mechanism of Tornado Cash.
While Tornado Cash remains favored for smaller-scale cybercrimes, CertiK highlighted a trend where incidents involving $50 million and above increasingly turn to Bitcoin-based laundering solutions. This shift could signify future challenges for the crypto space.
As the landscape of crypto laundering evolves, the need for dynamic countermeasures becomes urgent. Green suggested:
“Perhaps the most effective countermeasure is comprehensive tracing of movements of ‘dirty’ funds. The sharing of information with relevant parties such as exchanges is an important step as well.”
Additionally, Green emphasized the importance of stakeholders being aware of criminals' evolving tactics to effectively combat them.
(photo source: Blockonome)
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