New research from blockchain analytics and crypto compliance firm Elliptic reveals the extent to which bridges across chains and decentralized exchanges (DEX) have removed barriers to cybercriminals.

In their October 4 report, “The Case of Chain Crime,” elliptical researchers Eray Arda Akartuna and Thibaud Madelin delve deeply into what they describe as the “new frontier of crypto-laundering.” The report concluded that the free flow of capital between crypto assets is now unimpeded due to the emergence of new technologies such as bridging and DEXs.

Cybercriminals have used cross-chain bridges, DEXs, and currency exchanges to hide at least $4 billion in illicit crypto proceeds since the start of 2020, it has been reported.

About a third of all stolen cryptocurrencies, or roughly $1.2 billion, from the incidents investigated were exchanged on decentralized exchanges.

Going into detail, the report noted that more than half of the illicit funds it identified were exchanged directly through two DEXs, Curve and Uniswap, with a 1-inch pooling protocol in a third.

An amount equivalent to about $1.2 billion was laundered using currency exchange services that allow users to exchange assets within and across various networks without having an account.

“Many of them are advertised on Russian cybercrime forums and almost exclusively cater to the criminal audience,” he noted.

Sanctioned entities are increasingly turning to such technologies to transfer money and carry out cyber attacks, according to Elliptic:

Wallets linked to groups ultimately sanctioned by the United States — including those used by North Korea to carry out multi-million dollar cyber attacks — laundered more than $1.8 billion through these methods.
In a June report on the risks of digital assets, the Financial Action Task Force (FATF), the global watchdog on money laundering and terrorist financing, identified cross-chain bridging and “cross-chain navigation” as high risk.

RELATED: $2 Billion of Cryptocurrency Has Been Stolen from Cross Bridges This Year: Sequence Analysis

The Rainbridge has been cited as the top choice for crypto-laundering with the vast majority of illicit assets, or more than $540 million, passing through it.

“Ren has become particularly popular with those trying to launder the proceeds of theft,” she added.

Last month, Stanford researchers proposed a potential solution to reduce cryptocurrency theft. It includes a subscription token standard called ERC-20R that provides the ability to reverse a transaction over a specified period of time.

Source: CoinTelegraph