Lazarus Group Shifts Crypto Money Laundering Technique: Report
Blockchain analytics firm Chainalysis published its annual crypto crime report this week. Chainalysis highlights shifting crypto money laundering techniques amongst cybercriminals.
While overall funds moving from illicit wallets dropped, Chainalysis warns top hackers are spreading activity across more service accounts and utilizing advanced on-chain maneuvers.
- Cybercriminals diversify deposit addresses to avoid scrutiny.
- Lazarus Group adopts a new crypto mixer post-sanctions.
- Increased usage of cross-chain bridges to hop between chains
The report estimates that $22.2 billion in crypto funds were laundered through various crypto platforms last year. That’s down $31.5 billion from 2022. The report shows that centralized exchanges remain the primary laundering destinations.
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Drop in crypto money laundering due to strict regulations
Chainalysis suggests the drop in money launderers is primarily due to heightened law enforcement pressure.
In 2023, over 1,425 exchange deposit addresses interacted with $1+ million in illicit funds, compared to just 542 addresses in 2022. Wider distribution makes targeting specific accounts more difficult.
Sophisticated groups like North Korea’s infamous Lazarus Group also frequently shift tactics. When popular crypto mixer Sinbad was sanctioned, Lazarus pivoted to rival Bitcoin tumbler YoMix.
YoMix saw inflows jump 500% last year, one-third tied to hackers, per Chainalysis. Similarly, the use of cross-chain bridges exploded as criminals hopped between blockchains seeking anonymity.
Read more: U.S. NIST Flags Vulnerability For Binance Trust Wallet IOS App
The report estimates bridges transmitted $743.8 million of ill-gotten crypto in 2023, up from $312.2 million in 2022. Chainalysis attributes most activity to North Korea-affiliated hackers.
Lazarus Group’s technical expertise enables constant adaptation by exploiting cutting-edge protocols. Financial regulators warn crypto remains highly vulnerable to sanctions evasion and terror financing absent proper controls.
While illicit flows declined last year, Chainalysis emphasizes that bad actors evolve faster than policy.
