New data has revealed that, in 2021, criminals carried out around $8.6bn (£6.4bn) worth of cryptocurrency laundering, a 30% increase on the previous year.

Despite the numbers eclipsing the 2020 figures, it’s dwarfed by those from 2019, in which at least $10.9bn was laundered. Since 2017, criminals have laundered $33 billion worth of cryptocurrency, researchers said.

Chainalysis added that, should police target the vital crypto services that are being used to launder digital currency, they could strike a “huge blow against cryptocurrency-based crime” and “significantly hamper” criminals.

The UN Office of Drugs and Crime estimates that between $800bn and $2 trillion of fiat currency is laundered each year — as much as 5% of global GDP.

However, across 2021 money laundering accounted for just 0.05% of all cryptocurrency transactions.

In the report, Chainalysis said that the difference between fiat and cryptocurrencies is the advent of blockchain technology: “We can more easily trace how criminals move cryptocurrency between wallets and services in their efforts to convert their funds into cash,” it said.

According to a Europol report published on Wednesday, criminal networks specialised in large-scale money laundering, “have adopted cryptocurrencies and are offering their services to other criminals”.

Commenting on the research, Gary Cathcart, head of financial investigation at the NCA, told the BBC: “Whilst the vast amount of cryptocurrency use and exchange is for legitimate reasons, organised criminals have identified the benefits that cryptocurrency provides them.

“There are parts of the cryptocurrency structure that are being exploited to launder criminal cash, particularly from drug dealing. The growing menace of ransomware also utilises cryptocurrencies as its payment mechanism.

“Law enforcement is responding to this adoption by criminal gangs and cryptocurrency seizures are increasing. Legislative changes are also being progressed to assist with the response to cryptocurrencies being used in illicit finance practices.”

Chainalysis researchers said that that the laundered $8.6bn represents funds gained from crypto-native crime like darknet market sales or ransomware attacks in which profits are in crypto instead of fiat currencies.

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“It’s more difficult to measure how much fiat currency derived from offline crime — traditional drug trafficking, for example — is converted into cryptocurrency to be laundered,” Chainalysis said. “However, we know anecdotally this is happening.”

News of cryptocurrency theft has been ramping up over the last few years, with stories of police stings and crypto heists putting police forces under increased pressure to combat the growing problem.

In August last year, hackers stole $600m worth of cryptocurrency, making it one of the largest crypto gains in history.

The threat actors targeted a major decentralised finance (DeFi) platform resulting in the massive score.

However, there have been some successes in combatting crypto theft. The Met Police seized nearly £180 million in cryptocurrency as part of an anti-money laundering operation in July last year.

The seizure is believed to be the biggest of its kind and topped a record-breaking haul that saw £114m confiscated by Met Police detectives in June 2021.

US Treasury Department’s Office of Foreign Assets Control (OFAC) has also sanctioned over the counter crypto brokers Suex and Chatex for accepting funds from cybercriminals.

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