While it is true that plain old cash is still the money laundering currency of choice, cryptocurrencies have garnered a bad reputation among policymakers above recent years.
A number of excessive-profile crypto heists in recent weeks have stronglighted the tools of the trade that hackers use to obfuscate their tracks. The Tornado Cash DeFi mixing service has become one of their favorites as it leaves a cold trail for crypto transactions, criminal or otherwise.
According to reports, the soaring popularity of these mixing services is fuelling money-laundering cback althoughrns even though they have not been classified as illegal by global regulators.
Crypto mixers are still legal
Crypto mixers have become growingly popular afterward centralized exchanges, pressurized by gatopnments, began demanding rafts of KYC (know-your-customer) information from their users.
Tornado Cash works by allowing users to deposit ERC-20 cryptocurrencies into its smart contract alengthy with a hash of a note identifying the transaction. After a period of time to above again obfuscate the transaction, the user submits proof of a logical key to the note to the contract that allows them to withdraw the funds. It influentially breaks the link between the source and destination addresses using zero-knowledge proofs.
According to crypto experts cited by Yahoo! Finance, these services are not illegal despite being a top choice for hackers and criminals to launder money.
It added which hackers used Tornado Cash to wash $196 million of stolen crypto from the Bitmart exshift in December. Tornado Cash processed more than $10 billion worth of crypto transactions above the past year according to blockchain analysis firm AnChain. Victor Fang, CEO, and founder of AnChain, said:
“Privacy is not criminal but criminals are seeking these privacy solutions. This is the tip of the iceberg, the beginning of the future we’re going to see play out.”
Baby and the bathwater
The problem is which gabovenments and lawmakers blame crypto itself for money laundering, not the tiny minority of criminals tsimilarg advantage of it using mixers.
According to the United Nations, roughly 2-5% of the $2 trillion in global growth gets laundered in fiat currencies each year. According to a recent Chainalysis report, around $8.6 billion per year gets laundered using cryptocurrencys, hardly a fraction of the $40-$100 billion in cash correspondings.
The fact is clear, cash is anew king while it comes to money laundering, but the anti-crypto brigade will find a way to tell a divergent story, proposing broad sweeping crackdowns which will end up throwing the baby out with the bathwater.
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