New research from Elliptic, a company that does blockchain analytics and crypto compliance, has shown how much cross-chain bridges and decentralised exchanges (DEXs) have made it easier for cybercriminals to get around security measures.
Elliptic researchers Eray Arda Akartuna and Thibaud Madelin wrote a report on October 4 called “The State of Cross-Chain Crime.” In it, they went into detail about what they called “the new frontier of crypto laundering.” In short, the report said that new technologies like bridges and DEXs have made it easier for money to move freely between crypto assets.
It was said that since the beginning of 2020, cybercriminals have used cross-chain bridges, DEXs, and coin swaps to hide at least $4 billion in illegal crypto earnings.
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About a third of the cryptocurrency that was stolen, or about $1.2 billion, was traded on decentralised exchanges.
As the report went into more detail, it said that more than half of the illegal funds it found were directly traded through two DEXs: Curve and Uniswap. The 1-inch aggregator protocol came in a close third.
A similar amount, about $1.2 billion, has been cleaned up using coin swap services, which let people trade assets within and across networks without having an account.
“Many of them are advertised on Russian cybercrime forums and serve almost only criminals,” it said.
Elliptic says that sanctioned groups are using these kinds of technologies more and more to move money and launch cyberattacks.
“Wallets linked to groups that the U.S. eventually banned, like the ones North Korea used to launch cyberattacks that cost millions of dollars, have used these methods to wash more than $1.8 billion.”
The Financial Action Task Force (FATF), a group that keeps an eye on global money laundering and financing of terrorism, put out a report in June about the risks of virtual assets, cross-chain bridges, and “chain hopping” as all being high risks.
People said that the Ren Bridge was the best place to launder cryptocurrency because more than $540 million in illegal assets went through it.
It said that people who want to hide the money they stole are using Ren more and more.
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Researchers at Stanford came up with a possible way to stop crypto theft last month. It uses a standard for opt-in tokens called ERC-20R that lets you undo a transaction within a certain amount of time.
