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New research from blockchain analytics and crypto compliance firm Elliptic has revealed the extent to which cross-chain bridges and decentralized exchanges (DEXs) have removed barriers for cybercriminals.<\/p>\n
In an Oct. 4 report<\/a> titled \u201cThe state of cross-chain crime,\u201d Elliptic researchers Eray Arda Akartuna and Thibaud Madelin took a deep dive into what they described as \u201cthe new frontier of crypto laundering.\u201d The report summarized that the free flow of capital between crypto assets is now more unhindered due to the emergence of new technologies such as bridges and DEXs.<\/p>\n Cybercriminals have been using cross-chain bridges, DEXs<\/a>, and coin swaps to obfuscate at least $4 billion worth of illicit crypto proceeds since the beginning of 2020, it reported. <\/p>\n Around a third of all stolen crypto, or roughly $1.2 billion, from the incidents surveyed, was swapped using decentralized exchanges.<\/p>\n Delving further into the details, the report noted that more than half of the illicit funds it identified were swapped directly through two DEXs \u2014 Curve and Uniswap, with the 1inch aggregator protocol coming a close third.<\/p>\n A similar amount (around $1.2 billion) has been laundered using coin swap services which allow users to swap assets within and across different networks without having an account.<\/p>\n \u201cMany are advertised on Russian cybercrime forums and cater almost exclusively to a criminal audience,\u201d it noted.<\/p>\n Sanctioned entities<\/a> are increasingly turning to such technologies in order to move funds and carry out cyber-attacks, according to Elliptic.<\/p>\n \u201cWallets connected to groups eventually sanctioned by the United States \u2013 including those used by North Korea to perpetrate multi-million-dollar cyberattacks \u2013 have laundered more than $1.8 billion through such techniques.\u201d<\/p><\/blockquote>\n In a June report<\/a> on virtual asset risks, global money laundering, and terrorist financing watchdog, the Financial Action Task Force (FATF), also fingered cross-chain bridges and \u201cchain hopping\u201d as a high risk.<\/p>\n Related:<\/em><\/strong> <\/em><\/strong>$2B in crypto stolen from cross-chain bridges this year: Chainalysis<\/em><\/strong><\/a><\/p>\n The Ren bridge was mentioned as a top choice for crypto laundering with the vast majority of illicit assets, or more than $540 million<\/a>, passing through it. <\/p>\n \u201cRen has become particularly popular with those seeking to launder the proceeds of theft,\u201d it said.<\/p>\n One potential solution to mitigate crypto theft was proposed by Stanford researchers<\/a> last month. It involves an opt-in token standard called ERC-20R that provides the option to reverse a transaction within a set time period.<\/p>\n<\/div>\n