Chainalysis: Traditional money launderers are beginning to use cryptocurrency for large-scale money laundering

ChainCatcher message, Chainalysis report indicates that traditional money launderers (criminals outside the cryptocurrency space) may also be transferring their cash on-chain. Kim Grauer, the research director at Chainalysis, stated that traditional money launderers are beginning to utilize crypto networks to create a "massive money laundering infrastructure" to wash cash from non-crypto domains.

These transfers do not originate from addresses related to crypto scams, thefts, and ransomware attacks marked on-chain by Chainalysis; in contrast, these transactions are more opaque and come from wallets not considered illegal. These funds flow into exchanges across blockchains according to strategies that traditional financial compliance departments might flag. For example: splitting into integer parts just below the KYC reporting threshold, and then recombining them.

Grauer added that most on-chain investigators have been aware of this situation as a potential issue for years. However, she noted that the July report is Chainalysis's first attempt to document the scale of such activities on-chain. The company found that this figure is even several orders of magnitude larger than the known base of illegal transactions. In analyzing all transfers sent to exchanges in 2024, it discovered an excess of transactions just below the $10,000 threshold, which is where KYC rules come into effect.