Mixing Services Reaches All-time High Due To Illicit Activities: Chainalysis

• Cryptocurrencies sent to mixing services reached an all-time monthly high of $51.8 million in April.

• Mixing services allow cryptocurrency owners to obscure the source of funds.
• Chainalysis also revealed that the mixer usage saw significant quarter-over-quarter increase beginning in 2020.

Chainalysis, a blockchain research firm, has published data revealing the amount of cryptocurrency sent to mixing services. As per the data, it has reached an all-time monthly high of $51.8 million  in April. 

For the uninitiated, mixing services enable cryptocurrency owners to obscure the source of funds. Mixing services are both used for legitimate and illicit reasons. Often mixers pool funds together from multiple users. Then, compensate people with a fresh mix of cryptocurrency equaling their investment.

Moreover, Chainalysis revealed users can also receive different quantities of funds at different addresses at flexible times on some platforms. While others try to make it uncertain that they use a mixer. The researchers revealed that they do this by changing the type of deposit used or the fee on each transaction. 

According to Chainalysis researchers, there is a rise in illicit cryptocurrency moving to mixers.

So far in this year, criminal addresses accounted for 23% of funds sent to mixers. Last year it was 12%. Illicit addresses sent around 10% of all funds to mixers. And other services didn’t get past 0.3% in mixer sending share. 

On April 19, 2022, the 30-day moving average was recorded around $51.8 million. But it was twice the incoming volumes around the same time last year. 

Chainalysis noted that the mixer usage saw significant quarter-over-quarter rise beginning in 2020. However the growth has surpassed recorded in 2022, it still oscillates near all-time highs.

The major reason behind the rise is increased volumes from DeFi protocols, addresses connected to illicit activities and centralized exchanges. The increase in DeFi protocols is also in terms of the share of  all volume sent to mixers in addition to terms of value sent to mixers. It makes sense considering that the mining overlaps with DeFi’s rising prominence within the overall cryptocurrency ecosystem.

Ritika Sharma

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.