The blockchain has continued to grow and it is simultaneously appealing illicit activities too. About $100 billion has been flowed since 2019 from known illegal cryptocurrency wallets to money laundering services. The figure is just a fraction of the total illicit transactions.
Blockchain technology offers numerous legitimate uses and it has also facilitated an alarming trend. It is a shifting tactics of money launderers and of course posing a significant challenge as traditional anti-money laundering (AML) measures are struggling to keep pace with the evolving landscape of financial crime.
Experts suggest that combating money laundering in the blockchain era requires more than just updating existing techniques. The key is in utilizing advanced blockchain analysis technologies and abreast to it strengthening collaboration between law enforcement, financial institutions and global agencies is also required. The shift in money laundering trends demands innovative approaches now to tackle money laundering problem.
Recent advancements in blockchain analysis offer a glimmer of hope. Companies like Chainalysis have developed sophisticated tools which are designed to generate intelligence signals as well as provide concrete evidence of illicit activities within the blockchain networks. The tools help analysts and investigators to unravel the complex money laundering schemes by tracing transactions and identifying suspicious patterns as well.
However, the challenge extends beyond just identifying illicit transactions. Criminals are employing complex methods to disguise their activities such as crypto mixers, cross-chain bridges and multiple wallet transfers. The sophistication makes it crucial for investigators to adapt and use advanced technologies to stay ahead.
Portkey CTO Steven Deng emphasizes the importance of blockchain intelligence for law enforcement agencies. Agencies can trace funds and thereafter link crypto transactions to real-world entities. An extensive on-chain datasets and graphing tools are required for the purpose.
