‘Cross-chain bridges’ make illicit crypto harder to track

The rising use of “cross-chain bridge companies” — which switch cryptocurrency from one blockchain to a different, bypassing any centralized entities like an change — has made it harder to trace cryptocurrency funds, particularly the place it issues cash laundering. One such service alone, RenBridge, is believed to have laundered over $500 million in prison proceeds.

That is based on a latest report from Elliptic, which supplies cryptocurrency monitoring and compliance options. It famous that transaction quantity on these bridges has risen since October 2020, and whereas the latest peak appears to be this previous January, a whole lot of tens of millions of {dollars} price of transactions nonetheless happen repeatedly. The report urged that a lot of this exercise is linked immediately with prison exercise, noting that this started taking place as crypto exchanges turned extra regulated.

An evaluation by the corporate discovered that one cross-chain bridge specifically, RenBridge, has been used to launder no less than $540 million in cryptoassets originating from theft, fraud, ransomware and different forms of prison exercise since 2020. It additionally mentioned RenBridge is a vital facilitator for Russia-linked ransomware gangs, with over $153 million in ransom funds laundered by way of the service so far.

Purloined cryptocurrency makes up the most important portion of illicit exercise mentioned to be laundered by way of RenBridge, accounting for 49.2% of recognized proceeds, adopted by:

• Funds from ransomware assaults, at 28.4%;
• The mysterious “different” at 10.8%;
• Cash from Ponzi schemes, at 9%;
• Darkish internet markets at 2.1%; and,
• Stolen bank cards at 0.5%.

Whereas using cross-chain bridges has made cryptocurrency harder to trace, the report says it’s not unimaginable as a result of there stays an excessive amount of transparency within the sector. Doing so, nonetheless, normally entails lengthy handbook searches. Elliptic not too long ago launched software program that gives automation options for such investigations.