"After crypto hacks occur, scammers often move stolen funds through privacy-focused cryptocurrencies. While this has created a perception of hackers preferring privacy coins, these assets function as a specialized "black box" within a larger laundering pipeline. To understand why privacy coins show up after hacks, you need to take into account the process of crypto laundering. This article explores how funds move post-hack and what makes privacy coins so useful for scammers."
"Following a hack, scammers don't usually send stolen assets directly to an exchange for immediate liquidation; instead, they follow a deliberate, multi-stage process to obscure the trail and slow down the inquiry: Consolidation: Funds from multiple victim addresses are transferred to a smaller number of wallets. Obfuscation: Assets are shuffled through chains of intermediary crypto wallets, often with the help of crypto mixers. Chain-hopping: Funds are bridged or swapped to different blockchains, breaking continuity within any single network's tracking tools."
After crypto hacks, scammers typically follow a multistage laundering pipeline: consolidation of funds, obfuscation via intermediary wallets and mixers, chain-hopping across blockchains, and then conversion into privacy coins as a privacy layer. Privacy coins reduce on-chain visibility, delay blacklisting, and help break attribution links during attempted cash-outs. Enforcement actions against mixers and other laundering tools often push illicit flows toward alternative routes, including privacy coins. Privacy technologies also serve legitimate privacy needs, creating a regulatory trade-off between preserving innovation and preventing their abuse for laundering.
Read at Cointelegraph
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