Analytics firm Elliptic claims in a new report. Decentralized exchanges (DEXs), cross-chain bridges, and coin swap services are being used for money laundering due to their additional level of anonymity. Notable recent exploits include the Axie Infinity Ronin sidechain hack, which stole over $500 million (about 4,100 crore) and the $100 million (about 800 crore) Horizon Bridge attack.
The company clarified that while these tools often have legitimate use cases, they are also increasingly being used to handle funds related to activities such as theft, dark web services, etc. , mixing, scams and ponzi schemes, ransomware and others.
⚠️🚀Launching – our State of Cross-Chain Crime report uncovers cross-chain illegal activity over $4 billion in scale and demonstrates how the next generation of blockchain analytics can deliver A more comprehensive view of cryptocurrency risks.https://t.co/kJI3EsKtol#cybercrime
– elliptic (@elliptic) October 4, 2022
In the report titled “Cross-chain Crime,” the Elliptic researchers broke down their findings for each of these blockchain tools, starting with decentralized exchange or DEX. Since 2020, DEXs have facilitated the move of $1.2 billion (about Rs 9,800) in unprofitable assets, Elliptic said. DEXs are protocols that allow users to execute buy and sell orders with the help of smart contracts. The use of DEXs by criminals is closely related to mining in Decentralized Finance (DeFi) space and attacks by centralized exchanges, the company reports.
The cross rope bridge is the second type of tool that Elliptic finds popular among criminals. Here, Ellipse The researchers report that since 2020, criminals have made nearly $750 million (approximately Rs 6,100) in illicit funds through cross-chain bridges, an operation Elliptic calls “jumping ropes.” pass”. These bridges allow users to transfer assets between blockchain networks.
The third tool detailed in the report is “coin swaps” or non-KYC crypto-swapping services. These allow users to swap assets within and on blockchains without opening an account. According to Elliptic, coin swaps are mainly advertised on Russian cybercrime forums and mostly cater to criminals. These accounted for $1.2 billion (approximately Rs. 9,769 crore) in illicit transactions as of 2020.