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Cryptocurrency mixers hit record usage in 2022

The use of cryptocurrency mixers hit an all-time high in 2022, according to a report by Chainalysis. And we note an evolution in the majority addresses that send their funds there. Focus on this little-known sector of the ecosystem, and on the entities that use it.

https://cryptoast.fr/mixeurs-cryptomoines-record-utilisation-2022/

Use of cryptocurrency mixers on the rise in 2022

The Chainalysis report is unsurprisingly very pro-regulatory, with the company also attempting to “unmix” transactions through its services. But it gives a good overview the evolution of cryptocurrency mixersand their actual uses.

As a reminder, mixers (or “tumblers”) are platforms that make it possible to anonymize transactions in Bitcoin (BTC) or in other cryptocurrencies. They take their name from the initial process, which consisted of to mix the pieces with each other.

Mixers are of course useful for people who want to discreetly move cryptocurrency funds, but as Chainalysis points out, it’s not always criminal funds. The platforms can indeed be used by people living in totalitarian countries or who have not authorized cryptocurrencies. The desire to leave no trace can also be seen as an end in itself, especially for users close to the initial ideals of cypherpunks.

Once this context has been established, we can nevertheless point out that 10% of funds sent to mixers come from illicit sources. Less than 1% comes from high-risk exchanges, betting platforms, peer-to-peer exchanges, DeFi and centralized exchanges. Note, however, that Chainalysis does not report the remaining part, which is probably not analyzable.

👉 To go further – What is a Bitcoin tumbler, or mixer?

Volumes also up

The value received by mixers had peaked in early 2022, before plunging following the fall in cryptocurrency prices. On April 19, the average funds sent to mixers hit an all-time high of $51.8 million :

Figure 1: evolution of the value sent to cryptocurrency mixers

If we look at the origin of the funds received, we see that practices have changed in recent years. Since 2021, decentralized finance (DeFi) is now an important channeland there is also a breakthrough in centralized exchange platforms:

Origin cryptocurrency mixer funds

Figure 2: origin of funds sent to cryptocurrency mixers

There is also a breakthrough in illicit addresses, with funds having doubled since last year according to Chainalysis:

illegal addresses represent 23% of funds sent to mixers in 2022compared to 12% last year.»

👉 Read also – Crypto-crime: 93% of illicitly obtained assets were stolen

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Which Criminals Use Cryptocurrency Mixers?

The report also looks at the types of criminal activity that led to these transactions. In recent years, the majority of the volume comes from sanctioned platforms, like darknet marketplaces like Hydra Market. The second largest sector in terms of volume is represented by stolen funds:

Value sent cryptocurrency mixers

Figure 3: Category of addresses that sent funds to mixers

Other interesting data: in the category “entities subject to sanctions”, large criminal groups represent a very significant share of the volume for 2022, which is less heterogeneous than one might think. Thus, Hydra Marketplace represents more than 50% of the funds came from sanctioned entities sent to mixers in 2022. The North Korean group Lazarus, very often associated with large-scale hacks, represents 30%. We also note the 18% of Blender.io, which is itself a mixer associated with Lazarus:

Sanctions entities originating funds

Figure 4: sanctioned entities that used mixers in 2022

Chainalysis further notes a breakthrough of North Korean entities. It’s not really a surprise: the country has been using cryptocurrencies for years, including attacks targeting centralized exchanges.

👉 On the same topic – US sanctions mixer Blender.io, accusing it of helping North Korea in its hacks

The place of mixers in the ecosystem

Having the means to preserve one’s privacy is generally an achievement, especially in the cryptocurrency sector, which was built with this ideal in mind. Mixers therefore have their role to play, even if they are used by criminals. These data are also a reminder of something worth repeating: the majority of cryptocurrencies are not truly anonymousand it will be necessary to go through ancillary services so as not to leave any traces.

We should also point out that criminal activity now only represents 0.15% of cryptocurrency transactions. A figure that should be kept in mind when regulators and analysts point out the alleged danger of the sector.

👉 Also find out – Russian financial monitoring agency wants to monitor cryptocurrency transactions more closely

Source data and graphs: Chainalysis

published by editions Larousse

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