Privacy Wallets and Crypto Crime – A Top Trend in Illicit Use of Cryptocurrencies

Crypto skeptics and crypto enthusiasts rarely see eye to eye, but both camps can agree that the pace of change in the crypto world has been rapid and remarkable.

Once viewed as largely anonymous and difficult to trace, crypto transactions have become increasingly transparent as blockchain analytic tools have grown in sophistication. Crypto users seeking anonymity have in turn adapted, developing new tools and techniques to obscure transactions and shield crypto movement from scrutiny.

One of the latest innovations in the anonymity arms race is the rise of crypto privacy wallets. While these take many different forms, most privacy wallets combine security features like encryption and IP address anonymization with tools to obfuscate crypto transaction trails. They’ve gained a following among crypto purists and those simply looking for added safety when holding cryptocurrencies, but also among financial criminals and illicit actors.

In a recent webinar with ACFCS (see below for on-demand link), blockchain analytics firm Elliptic highlighted the increased use of privacy wallets as one of the top five emerging trends in financial crime and crypto.

In this episode of the CrimeCast, Elliptic’s Head of Policy and Regulatory Affairs David Carlisle takes a deep dive into the topic, giving insights on how and why privacy wallets are used for illicit transactions. He also gives insights into the regulatory response, and what institutions and organizations in the crypto space can do to mitigate potential risks.

View the On-Demand Webinar – The Top 5 Emerging Trends in Financial Crime in Crypto, Presented by Elliptic