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The amount of cryptocurrency flowing into privacy-enhancing mixer services has reached an all-time high this year as funds from wallets belonging to government-sanctioned groups and criminal activity almost doubled, researchers reported on Thursday.

Mixers, also known as tumblers, obfuscate cryptocurrency transactions by creating a disconnect between the funds a user deposits and the funds the user withdraws. To do this, mixers pool funds deposited by large numbers of users and randomly mix them. Each user can withdraw the entire amount deposited, minus a cut for the mixer, but because the coins come from this jumbled pool, it's harder for blockchain investigators to track precisely where the money went.

Some mixers provide additional obfuscation by allowing users to withdraw funds in differing amounts sent to different wallet addresses. Others try to conceal the mixing activity altogether by changing the fee on each transaction or varying the type of deposit address used.

Mixer use isn't automatically illegal or unethical. Given how easy it is to track the flow of Bitcoin and some other types of cryptocurrency, there are legitimate privacy reasons anyone might want to use one. But given the rampant use of cryptocurrency in online crime, mixers have evolved as a must-use tool for criminals who want to cash out without being caught by authorities.

"Mixers present a difficult question to regulators and members of the cryptocurrency community," researchers from cryptocurrency analysis firm Chainalysis wrote in a report that linked the surge to increased volumes deposited by sanctioned and criminal groups. "Virtually everyone would acknowledge that financial privacy is valuable, and that in a vacuum, there's no reason services like mixers shouldn't be able to provide it. However, the data shows that mixers currently pose a significant money laundering risk, with 25 percent of funds coming from illicit addresses, and that cybercriminals associated with hostile governments are taking advantage."

The report added: "Mixers may soon become obsolete as Chainalysis continues to refine the ability to demix certain mixing transactions and see users original source of funds. But for the time being, our data shows that mixers are receiving more cryptocurrency than ever in 2022."

Cryptocurrency received by these mixers fluctuates significantly from day to day, so researchers find it more useful to use longer-term measures. The 30-day moving average of funds received by mixers hit $51.8 million in mid-April, an all-time high, Chainalysis reported. The high-water mark represented almost double the incoming volumes at the same point last year. What's more, illicit wallet addresses accounted for 23 percent of funds sent to mixers this year, up from 12 percent in 2021.

As the graph below illustrates, the increases come most notably from higher volumes sent from addresses connected to illicit activity, such as ransomware attacks, cryptocurrency scams, and stolen funds carried out by groups sanctioned by the US government. To a lesser extent, volumes sent from centralized exchanges, DeFi, or decentralized finance protocols, also drove the surge.

Chainalysis

A breakdown of volumes connected to illicit sources shows that the spike is driven primarily by sanctioned entitiesmainly Russian and North Korean in originfollowed by cryptocurrency thieves and fraudsters pushing cryptocurrency investment scams.

Chainalysis

The sanctioned entities are led by Hydra, a Russia-based dark web market that serves as a haven for criminals to buy and sell services and products to one another. In April, the US Department of Treasury sanctioned Hydra to stymie the group's efforts to liquidate their ill-gotten proceeds. The remaining volume from sanctioned groups came from the North Korean hacking group Lazarus and the Blender.io tumbler, which the US Treasury Department sanctioned earlier this year for serving the North Korean government.

Chainalysis

Despite their utility, mixers suffer a critical Achilles' heel: Large transactions make them ineffective, meaning that they work less efficiently when people use them to deposit large amounts of cryptocurrency.

"Since users are receiving a 'mix' of funds contributed by others, if one user floods the mixer and contributes significantly more than others, much of what they end up with will be made up of the funds they originally put in, making it possible to trace the funds back to their original source," Thursday's report explained. "In other words, mixers function best when they have a large number of users, all of whom are mixing comparable amounts of cryptocurrency."

Post updated to correct description of Blender.io.

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Cryptocurrency flowing into mixers hits an all-time high. Wanna guess why? - Ars Technica

Cryptocurrency exchange KuCoin has announced its investment from trading firm Susquehanna International Group (SIG). Apart from around a $10 million investment, the two parties plan to collaborate in blockchain startup incubation and KCS & KCC ecosystem building.

The support of SIG will aim to solidify our role as a centralised exchange and facilitate our ecosystem expansion in the decentralised Web3.0 world, Johnny Lyu, CEO, KuCoin, stated.

According to the cryptocurrency exchange, it will use the funds to upgrade platform infrastructure and enrich the product lineup, preparing for the next bull run. The capital will also support KuCoins global expansion and hiring plan. Despite the current cryptocurrency winter, KuCoin claims to have 300 job openings to be filled. In addition, KuCoin and SIG aim to jointly support cryptocurrency startups through incubation, investment, and consultation, especially the projects built on the KCC chain.

As per the SIG investment team, they believe this cooperation will create a synergy between SIG and KuCoin, with the aim to benefit the cryptocurrency industry by bringing it to a wider audience.

In May 2022, KuCoin raised $150 million led by Jump Crypto through a pre-Series B round, bringing its total investments to $170 million with Round A combined, at a total valuation of $10 billion.

SIG is a global quantitative trading firm. It claims to support trading of all listed financial products and asset classes, with a focus on derivatives, and also claims to handle millions of transactions on exchanges worldwide every day.

Established in 2017, KuCoin claims to have over 20 million users globally. The platform also claims to have supported trading of over 700 tokens and 1,200 trading pairs. According to its 2022 H1 review report, the exchange has achieved over $2 trillion in trading volume, a 180% increase compared to the same period in 2021.

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Cryptocurrency based KuCoin secures $10 million investment from trading firm SIG - The Financial Express

Over the past 24 hours, Wrapped Bitcoin's WBTC/USD price has risen 6.43% to $23,381.00. This continues its positive trend over the past week where it has experienced a 17.0% gain, moving from $19,861.82 to its current price. As it stands right now, the coin's all-time high is $70,643.00.

The chart below compares the price movement and volatility for Wrapped Bitcoin over the past 24 hours (left) to its price movement over the past week (right). The gray bands are Bollinger Bands, measuring the volatility for both the daily and weekly price movements. The wider the bands are, or the larger the gray area is at any given moment, the larger the volatility.

The trading volume for the coin has risen 115.0% over the past week diverging from the circulating supply of the coin, which has decreased 4.71%. This brings the circulating supply to 237.73 thousand, which makes up an estimated 100.0% of its max supply of 237.73 thousand. According to our data, the current market cap ranking for WBTC is #18 at $5.54 billion.

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Cryptocurrency Wrapped Bitcoin Up More Than 6% In 24 hours - Benzinga - Benzinga

OKB's OKB/USD price has decreased 3.24% over the past 24 hours to $14.54. This is contrary to the coins performance over the past week where it has experienced an up-trend of 18.0%, moving from $12.29 to its current price.

The chart below compares the price movement and volatility for OKB over the past 24 hours (left) to its price movement over the past week (right). The gray bands are Bollinger Bands, measuring the volatility for both the daily and weekly price movements. The wider the bands are, or the larger the gray area is at any given moment, the larger the volatility.

The trading volume for the coin has climbed 99.0% over the past week, moving opposite, directionally, with the overall circulating supply of the coin, which has decreased 0.22%. This brings the circulating supply to 256.39 million. According to our data, the current market cap ranking for OKB is #22 at $3.71 billion.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.

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Cryptocurrency OKB Decreases More Than 3% Within 24 hours - Benzinga - Benzinga