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Total crypto laundered in 2023 drops 29.5% y-o-y, but North Korea-linked hackers are finding new tactics: Chainalysis

Nicole Lim
Nicole Lim • 3 min read
Total crypto laundered in 2023 drops 29.5% y-o-y, but North Korea-linked hackers are finding new tactics: Chainalysis
North Korea-affiliated cybercriminals are using new “mixers” and “bridge protocols” to launder cryptocurrencies. Photo: Bloomberg
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The total amount of cryptocurrency laundered dropped 29.5% y-o-y to US$22.2 billion ($29.98 billion) in 2023 from US$31.5 billion in 2022, according to crypto forensics firm Chainalysis in their latest chapter release of their annual crypto crime report.

However, “sophisticated cybercriminal groups” such as the Lazarus Group — a North Korean state-sponsored cyber threat group — have taken on new laundering tactics, such as adapting their mixer usage, and using cross-chain bridges to move funds. 

A cross-chain bridge is a term for a software that enables the transfer of cryptocurrency or blockchain assets between blockchain networks. Chainalysis finds that bridge protocols for money laundering grew “substantially” to US$743.8 million in 2023, from US$312.2 million in 2022. 

North Korea-affiliated hackers have been among those to utilise bridges for money laundering the most, says the firm. 

Meanwhile, a mixer refers to a service that mixes potentially identifiable or “tainted” cryptocurrencies with others. While 2023 saw a decline in funds sent to mixers from illicit addresses, from US$1 billion in 2022 to US$504.3 million in 2023, North Korea-affiliated hackers have moved on to Bitcoin-based mixer YoMix, after the US shut down commonly used mixer Sinbad in November 2023. 

Chainalysis finds that YoMix saw a huge growth in 2023, with inflows growing by more than five times over the course of the year. In January this year, CoinDesk reported that Lazarus Group moved US$1.2 million worth of cryptocurrencies from a mixer to a holding wallet, their “largest transaction in over a month”. 

See also: Bitcoin developers are touting ‘programmability’ as the catalyst for the next rally

Lazarus Group is said to have been behind US$3 billion worth of cryptocurrency hacks and exploits over the past three years, according to a report by cybersecurity firm Recorded Future. 

Although it remains that the overall volume of crypto laundered has decreased y-o-y, Chainalysis says that this could be attributed to an overall decrease in crypto transaction volume, both legitimate and illicit. It finds that the drop in money laundering activity compared to a drop in total transaction volume is steeper, at 29.5%, compared to 14.9%. 

Earlier chapters of Chainalysis’ 2024 crypto crime report also found that the number of North Korea-linked hacks of cryptocurrency platforms rose to a record high in 2023, though the actual amount of funds stolen dropped around 40%. 

See also: Online casino guide platform finds Singapore ninth-most 'crypto-friendly' country globally

In a series of 20 hacks throughout the year, cybercriminals linked to the Democratic People’s Republic of Korea syphoned slightly more than US$1 billion worth of cryptocurrency, compared to US$1.7 billion in 2022. 

Another chapter revealed that cybercriminals stole about US$1.1 billion worth of crypto through ransomware attacks in 2023, a 94% y-o-y increase or the most that has been stolen in all of crypto forensics firm Chainalysis’ history of reporting on crypto crimes.

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