‘New frontier’ of crypto laundering involves cross-chain bridges and DEXs: Elliptic

New analysis from blockchain analytics and crypto compliance agency Elliptic has revealed the extent to which cross-chain bridges and decentralized exchanges (DEXs) have eliminated obstacles for cybercriminals.

In an Oct. 4 report titled “The state of cross-chain crime,” Elliptic researchers Eray Arda Akartuna and Thibaud Madelin took a deep dive into what they described as “the brand new frontier of crypto laundering.” The report summarized that the free stream of capital between crypto belongings is now extra unhindered as a result of emergence of recent applied sciences comparable to bridges and DEXs.

Cybercriminals have been utilizing cross-chain bridges, DEXs, and coin swaps to obfuscate a minimum of $4 billion value of illicit crypto proceeds for the reason that starting of 2020, it reported.

Round a 3rd of all stolen crypto, or roughly $1.2 billion, from the incidents surveyed, was swapped utilizing decentralized exchanges.

Delving additional into the small print, the report famous that greater than half of the illicit funds it recognized have been swapped immediately via two DEXs — Curve and Uniswap, with the 1inch aggregator protocol coming a detailed third.

An analogous quantity (round $1.2 billion) has been laundered utilizing coin swap companies which permit customers to swap belongings inside and throughout totally different networks with out having an account.

“Many are marketed on Russian cybercrime boards and cater nearly completely to a felony viewers,” it famous.

Sanctioned entities are more and more turning to such applied sciences so as to transfer funds and perform cyber-attacks, in accordance with Elliptic.

“Wallets related to teams ultimately sanctioned by the USA – together with these utilized by North Korea to perpetrate multi-million-dollar cyberattacks – have laundered greater than $1.8 billion via such methods.”

In a June report on digital asset dangers, international cash laundering, and terrorist financing watchdog, the Monetary Motion Process Drive (FATF), additionally fingered cross-chain bridges and “chain hopping” as a excessive danger.

Associated: $2B in crypto stolen from cross-chain bridges this 12 months: Chainalysis

The Ren bridge was talked about as a best choice for crypto laundering with the overwhelming majority of illicit belongings, or greater than $540 million, passing via it.

“Ren has grow to be notably standard with these looking for to launder the proceeds of theft,” it stated.

One potential answer to mitigate crypto theft was proposed by Stanford researchers final month. It entails an opt-in token normal referred to as ERC-20R that gives the choice to reverse a transaction inside a set time interval.