attackers laundered $7 billion through cross-chain solutions

potential criminal cases for counterparties bitzlato, hydra, finico, money laundering
potential criminal cases for counterparties bitzlato, hydra, finico, money laundering

The volume of illegal crypto assets laundered using cross-chain transactions reached a record $7 billion in a year. This is stated in a report from Elliptic.

Analysts included three categories of this criminal activity:

  • decentralized exchanges that make it possible to exchange cryptocurrencies, including within the same blockchain;
  • cross-chain bridges through which coins move between networks;
  • crypto exchange services that do not follow the rules KYC.

In the first “State of Online Crime” report published in October 2022, Elliptic experts counted $4.1 billion in assets laundered through these routes. According to their estimates, by the end of 2023 the figure should have been $6.5 billion.

“However, our latest $7 billion estimate demonstrates that online crime is growing at a faster rate than predicted,” the analysts stated.

In their opinion, the popularity of money laundering using this method is associated with:

  • the transition of criminal activity from Bitcoin to other coins with attractive qualities such as confidentiality (Monero, etc.) or stable prices (stablecoins USDT, DAI, etc.);
  • generating criminal proceeds in tokens other than digital gold, for example, as a result of hacking DeFi protocols;
  • the lack of verification for cross-chain services, unlike centralized platforms;
  • the lack of analytical tools that allow you to reliably track transactions between blockchains;
  • enforcement actions against mixers and exchanges that do not comply with KYC rules, which has led to the search for alternatives.
Elliptic: attackers laundered $7 billion through cross-chain solutions
Dynamics of the ratio of funds laundered through mixers (blue) and cross-chain bridges (red) by month. Data: Elliptic.

Through decentralized exchanges alone, attackers laundered $3.9 billion in 12 months as of July 2023. Compared to the previous period, the figure increased by 82%.

Elliptic: attackers laundered $7 billion through cross-chain solutions
The state of inter-network crime by service and origin of funds by year. Data: Elliptic.

By asset origin, criminal internet transactions have increased significantly in the Ponzi and theft segments.

The Lazarus Group, associated with the hacker group, accounted for $900 million – about a seventh of the total amount.

Let us remind you that from January to August, the Web3 industry lost $1.25 billion from hackers and scammers, according to Immunefi analysts.

September was the record month of the year with losses of $329.8 million, according to CertiK.

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