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 boundaries 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 new frontier of crypto laundering.” The report summarized that the free move of capital between crypto belongings is now extra unhindered as a result of emergence of new applied sciences resembling bridges and DEXs.
Cybercriminals have been utilizing cross-chain bridges, DEXs, and coin swaps to obfuscate not less than $4 billion value of illicit crypto proceeds because the starting of 2020, it reported.
Around 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 had been swapped straight by 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 providers which permit customers to swap belongings inside and throughout completely different networks with out having an account.
“Many are advertised on Russian cybercrime forums and cater almost exclusively to a criminal audience,” it famous.
Sanctioned entities are more and more turning to such applied sciences so as to transfer funds and perform cyber-attacks, in line with Elliptic.
“Wallets connected to groups eventually sanctioned by the United States – including those used by North Korea to perpetrate multi-million-dollar cyberattacks – have laundered more than $1.8 billion through such techniques.”
In a June report on digital asset dangers, international cash laundering, and terrorist financing watchdog, the Financial Action Task Force (FATF), additionally fingered cross-chain bridges and “chain hopping” as a excessive threat.
Related: $2B in crypto stolen from cross-chain bridges this yr: 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 by it.
“Ren has become particularly popular with those seeking to launder the proceeds of theft,” it stated.
One potential resolution to mitigate crypto theft was proposed by Stanford researchers final month. It involves an opt-in token commonplace known as ERC-20R that gives the choice to reverse a transaction inside a set time interval.