Bitfury Crystal, a blockchain analytics platform has released a new report detailing the use of bitcoin transaction mixers by darknet users from 2019 to Q1 2020. The report states that darknet entities used bitcoin transaction mixers to cover their paths more in the first quarter of 2020 as compared to 2019, according to a blog post on July 14, 2020.
Darknet Vendors Increasingly Using Bitcoin (BTC)
With financial regulatory authorities such as the Financial Actions Task Force (FATF), Financial Crimes Enforcement Network (FinCEN), and others now putting in place strict regulations aimed at reducing money laundering and terrorist financing, darknet users have now turned to bitcoin transaction mixers to cover their transaction paths.
According to the latest report by Bitfury Crystal, darknet entities sent a significantly low amount of bitcoin to exchanges and other entity types in Q1 2020, though the dollar value of these funds grew by 65 percent, as compared to the same period last year.
The report reads:
“This is not just due to the increase in the USD value of bitcoin from 2019 to 2020. The amount of money being transferred by darknet entities is still growing, and they are continuing to use bitcoin as a medium of transport. The mass adoption of bitcoin, as well as its ease of use and popularity, is a contributing factor as well.”
Darknet Entities Used More Mixers in Q1 2020
Notably, the report has revealed that in Q1 2020, darknet users employed the use of mixers to cover their transaction paths more and during the same period, the amount of bitcoin sent to exchanges with strict KYC/AML procedures decreased significantly, a strong indication that bad actors prefer using anonymous services like mixers for their illicit deals than exchanges.
“In Q1 2019, only 1 percent of BTC was sent to mixers. However, in Q1 2020, it rose to 20 percent. In comparison, the share of bitcoin sent to exchanges with strict KYC/AML requirements dropped from 24 percent in Q1 2019, to 13 percent in Q1 2020,” declared the report, adding that the drastic decline could be as a result of increased regulatory oversight on exchanges by financial watchdogs.
Interestingly, the report also reveals that in Q1 2020, darknet entities also sent a lower share of bitcoin to exchanges (46 percent) without KYC requirements, as compared to the same period last year (60 percent).
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