Bitcoin Network Now a Haven for $300M in Illicit Funds Post-Tornado Cash

• Bitcoin mixers are seeing increased use by cybercriminals to launder money after the shutdown of services like Tornado Cash. They break funds into smaller pieces sent to many wallets, making them much harder to track.
• Over $300 million from major crypto hacks this year has reached Bitcoin mixers according to blockchain analytics firm CertiK. North Korea’s Lazarus Group is a major threat, stealing 30% of crypto losses in Q3 2022.
• Regulators worldwide are concerned about criminals exploiting decentralized blockchains to launder money. The US, South Korea, and Japan are partnering to combat North Korea’s use of crypto mixing services to launder stolen funds.

The recent shutdown of the popular Ethereum-based crypto mixing service Tornado Cash has led to increased use of Bitcoin mixing services by cybercriminals looking to launder money discreetly.

How Bitcoin Mixers Work

Bitcoin mixers enable users to deposit Bitcoin, which is then broken up into smaller pieces and distributed across many different wallets. This makes the funds much harder to track compared to traditional crypto mixers.

Scale of Losses Reaching Bitcoin Mixers

According to blockchain analytics firm CertiK, over $300 million from 50 of the biggest crypto exploits this year has reached Bitcoin mixers. Crypto hacks have resulted in losses over $1.7 billion in 2022.

The Threat Posed by the Lazarus Group

North Korea’s Lazarus Group has become a major threat, stealing 30% of all crypto losses in Q3 2022. They have started using Bitcoin mixers after crackdowns on services like Tornado Cash.

How Bitcoin Mixers Differ from Traditional Mixers

Bitcoin mixers break funds into smaller pieces sent to many wallets, while traditional mixers pool funds before sending them back minus a fee. This makes Bitcoin mixed funds much harder to recover.

Concerns Over Criminals Exploiting Blockchains

CertiK’s research shows cybercriminals exploiting decentralized blockchains to launder money. Regulators worldwide are now taking notice of this threat to global finance.

Global Efforts to Combat Crypto Hacks

The US, South Korea, and Japan are partnering to stop North Korea from using crypto mixing to launder money stolen through hacking. Monitoring illicit mixer use is a key focus.