How Crypto, Dark-Web Markets and Mixers Are Used to Launder Money
Summary
An explainer outlines how dark-web proceeds, crypto conversion services, NFTs and mixers can support money laundering, while public blockchains can help investigators trace funds. It also reviews Tornado Cash and related enforcement actions.
Key points
- The article maps traditional laundering stages—placement, layering and integration—to cryptocurrency transactions and cash-out through exchanges or NFT sales.
- Dark-web marketplaces can generate illicit funds directly in cryptocurrency, which criminals may then move through conversion services, DeFi protocols, gambling sites, mixers or cross-chain bridges.
- Chainalysis reported that funds sent from illicit addresses to NFT marketplaces reached about $1.4 million in Q4 2021; the article describes NFT laundering as a relatively small but visible activity.
- Mixers pool and redistribute cryptocurrency to obscure links between incoming and outgoing funds; the article names Tornado Cash, Blender.io, ChipMixer and Wasabi Wallet’s CoinJoin feature.
- Public blockchain records can help law enforcement and analytics firms trace illicit funds, although the article notes that privacy-focused coins such as Monero offer greater concealment.
- The article says Tornado Cash was sanctioned by OFAC in August 2022 and that two alleged founders were indicted in 2023; the indictment accused them of facilitating more than $1 billion in laundering, including funds for Lazarus Group.
Article Details
- Topic
- Digital money laundering methods involving cryptocurrency, dark web marketplaces, NFTs, mixers, and privacy tools.
Threat Actors
Products
BitcoinThis means that criminals increasingly acquire illicit funds already in digital form, like Bitcoin, rather than cash.Blender.ioPopular mixer implementations have included Tornado Cash (for Ethereum) and various Bitcoin tumbling services (like Blender.io, ChipMixer, Wasabi wallet’s CoinJoin feature, etc.).ChipMixerPopular mixer implementations have included Tornado Cash (for Ethereum) and various Bitcoin tumbling services (like Blender.io, ChipMixer, Wasabi wallet’s CoinJoin feature, etc.).EthereumPopular mixer implementations have included Tornado Cash (for Ethereum) and various Bitcoin tumbling services (like Blender.io, ChipMixer, Wasabi wallet’s CoinJoin feature, etc.).MoneroTools like Bitcoin and Ethereum have public ledger trails, but coins like Monero offer near-total concealment but are harder to cash out.Tornado CashPopular mixer implementations have included Tornado Cash (for Ethereum) and various Bitcoin tumbling services (like Blender.io, ChipMixer, Wasabi wallet’s CoinJoin feature, etc.).Wasabi walletPopular mixer implementations have included Tornado Cash (for Ethereum) and various Bitcoin tumbling services (like Blender.io, ChipMixer, Wasabi wallet’s CoinJoin feature, etc.).