The United Kingdom’s National Crime Agency (NCA) calls for the regulation of crypto coin mixers as criminals use it to avoid detection when laundering money through cryptocurrencies.
As per reports, Gary Cathcart, the head of financial investigation at NCA, explained that these transaction mixing tools provide anonymity to criminals that is later used for “churning criminal cash, obscuring its origins and audit trail.”
Cathcart asks regulators to include these open-source mixing tools under money laundering regulations. This makes it compulsory for these service providers to tick off Anti-Money Laundering checks and audit transactions passing through their platforms.
This would allow users to probe serious criminal activity like ransomware attacks, fraud, state-sponsored crime, and terrorism as explained by Cathcart.
Coin mixing tools maintain the privacy of transactions in the decentralized world. These tools ‘mix’ several transactions to conceal the starting point of a particular transaction.
Following which, the recipient receives the transactions from a mixing “black box” including several transactions from various wallets. Although these tools are typically for privacy, they also become instruments for nuisance for hackers and criminals.
The testament to this is the fact that a Chainalysis report informed that crypto money laundering rose up to 30% (approx $8.6 billion) in comparison to 2020. The data also revealed that mining pools, high-risk exchanges, and mixers also saw substantial increases in value received from illicit addresses.