Chainalysis, a top company that follows crypto, has a new report. People who illegally move money might be using blockchain. Blockchain records information that makes it hard to change, hack, or cheat the system. This report was made public on Thursday. It talks about more and more on-chain transactions. These are not illegal, but they look like transactions that would worry traditional banks.

Why Laundering Moving to Crypto?

____________________________________________________________________________________________________________________________________________________________

• Chainalysis report indicates the possible use of blockchain by traditional money launderers.
• Transactions raising concerns are not linked to known illicit activities but bear suspicious patterns typical of traditional banks.
• It says traditional banking compliance techniques must be factored into the crypto industry.

______________________________________________________________________________________________________________________________________________________________

Kim Grauer, the Head of Research at Chainalysis, explained to CoinDesk that these people might be using crypto networks to build extensive systems for cleaning dirty money. This dirty money is money that was gotten outside of the crypto world.

These transactions differ from the crypto scams, thefts, and attacks that Chainalysis is known for stopping. Chainalysis helps places where you can trade crypto and other groups and avoid money that might be connected with wrong actions. They also help government investigators find people who might have done something bad.

Interestingly, these transactions come from wallets, not linked to bad things. They’re put together in a way that usually worries traditional banks. They’re divided into round parts under the reporting limits of known-your-customer (KYC) rules, which are later put back together.

People who keep an eye on blockchain have thought this activity has been happening for some time. But this report is Chainalysis’s first try to measure how big this trend is across the entire blockchain. The findings suggest this type of transaction is much bigger than the known base of bad transactions.

When Chainalysis looked at all transfers sent to exchanges in 2024, they found many transactions valued just under $10,000. This is the point where more KYC rules kick in. But Grauer said this alone does not clearly show bad activity, as many things are considered when looking at suspicious transactions.

According to the report, transactions going to brokers who advertise openly turning crypto into cash with no questions asked are far more likely to exhibit destructive activities.

Finally, Grauer said, the findings should spark a conversation about how the crypto industry can apply rules developed in traditional banking.

Stay ahead with our newsletter—what’s most exciting and exclusive in cryptocurrency-related things. Subscribe Today to be part of the community of empowered readers.