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New age of crypto crime; how criminals have evolved- a detailed report

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A new study published by crypto analytics and compliance platform Elliptic, took a close look at the exploitation of web3 platforms to facilitate money laundering. 

The study, titled “The state of cross-chain crime” talked about the new age of crypto crime and how criminals have evolved with the development of technology. 

$4 billion laundered

Elliptic’s research revolved around three web3 products, namely decentralized exchanges (DEXs), cross-chain bridges, and coin-swap services. 

With bridges and swap services at their disposal, cyber criminals have been able to obscure a $4 billion money trail originating from illicit activities.

“Some of the most prolific perpetrators include hackers, dark web markets, online gambling platforms, illicit virtual asset services, ponzi schemes, and ransomware.” the report further read.

Decentralized exchanges

Stolen crypto from DeFi exploits to the tune of $1.2 billion have made their way to DEXs in order to get swapped for a different asset. This accounts for over one-third of the crypto exploits surveyed for the report. 

Uniswap, Curve Finance, and 1Inch DEX aggregator are among the DEXs that have been identified as the preferred platforms for swapping by criminals. 

Coin-swap and bridges

Furthermore, cyber criminals have been able to launder another $1.2 billion using coin swap services. This involves swapping assets within and across blockchains, without having to register for an account. These services are particularly popular among bad actors.

Cross-chain bridges are also utilized by criminals to blur their illegal activities by adding a layer of anonymity, making it difficult to trace transactions. 

RenBridge is one such platform that has processed as much as $540 million worth of illicit assets for criminals 

Matter of concern

This misuse of technology is not just limited to individual hackers looking for a lucky payday. Bridge and swap services have made it easier for sanctioned as well as terrorist entities to mask their activities and keep preying on people’s funds. 

Proceeds from cyberattacks originating from North Korea have been laundered through such services. The estimated amount is somewhere around $1.8 billion. 

In its Virtual Assets Report published earlier this year in June, the Financial Action Task Force took cognizance of the growing use of cross-chain bridges in money laundering, calling it a high-risk matter. 

The report also urged member agencies to introduce the “travel rule” for crypto regulation. The rule requires virtual asset service providers to share descriptive information about transactions that exceed $1000. 

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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