Cyber-criminals are finding new ways to hide the proceeds of their illegal activities by diverting funds to crypto mining pools, a recent report from Chainalysis reveals.
Mining pools, which allow multiple miners to combine their computing power, are being used as a way to mix and obscure the origin of funds, similar to traditional mixers. This tactic creates the illusion that the funds are generated through legitimate mining activities rather than through criminal activities such as ransomware.
According to Chainalysis, there has been a significant increase in the value of funds sent from ransomware wallets to mining pools since the beginning of 2018. Millions of dollars’ worth of cryptocurrency have been funneled from ransomware addresses to mining pools each quarter over the past year.
The report also highlights a trend where ransomware funds are being transferred to exchange deposit addresses that receive substantial amounts from mining pools. This suggests that criminals are attempting to disguise their illicit funds as legitimate mining proceeds.
Not only ransomware actors, but also crypto scammers are utilizing mining pools to launder their funds, further complicating the issue of tracing the origin of funds in the crypto space.
Chainalysis suggests that this issue can be addressed if mining pools and hashing services implement stricter screening measures for wallet addresses linked to criminal activity. Exchanges should also exercise caution when receiving funds from wallets associated with mining pools, using available tools to verify the legitimacy of transactions.
By staying vigilant and implementing enhanced security measures, the crypto community can work together to combat the illicit use of mining pools for money laundering purposes.