A new report from Chainalysis has shown an increase in the usage of crypto mixer as a service, pushing it to an All-Time High (ATH) this year. Per the report, nearly 10% of all funds sent from illicit addresses are forwarded to crypto mixers, an occurrence that has continually posed a challenge to regulators and security operators worldwide.
Crypto mixers are a kind of cryptocurrency service that helps to obfuscate the trail of transactions such that it becomes very difficult to track them. In explaining the types of crypto mixers there are, Chainalysis point out that smart contract mixers is also well used alongside Centralized and CoinJoin mixers respectively.
While they seem effective, the report noted that they have a limitation in handling big transactions, which oftentimes forces the smart contracts to send the funds back without mixing, thus creating a loophole that investigators can use to track funds.
Per the report, the 30-day moving average of the total daily value received by crypto mixers reached a new all-time high of $51.8 million in April 2022, a figure that is two times that recorded back in 2021.
Controversial Position of Crypto Mixers
Chainalysis noted that the crypto mixers are not an entirely bad service, seeing some people actually use them for legitimate reasons.
However, the blockchain security firm said most mixers aren’t abiding by the requirements to be fully registered with the FinCEN and appropriate authorities, thus making most operations illegal.
“We aren’t aware of any mixers currently following rules related to KYC processes, source of funds checks, and other basic customer identification and due diligence regulations that MSBs are subject to in most jurisdictions. Given that increased privacy is the whole point of using a mixer, it seems unlikely that one could implement those compliance procedures and retain its user base,” the report reads.
Blender.io is one of the most prominent mixers in the global scene and was reportedly used by the Lazarus Group who looted the Ronin Bridge treasury back in May. For its role, the United States Treasury Department has added Blender.io to its sanctions list and barred Americans from transacting with the platform.