Does Elliptic Have A Solution To The $4 Billion Illicit Crypto Problem
Elliptic, a cryptoasset risk management firm, has released data showing that criminals have hidden over $4 billion in cryptocurrency gains by using DeFi exchanges (DEXs), cross-chain bridges, and “coin swap” services.
Hackers, dark web markets, illegal virtual asset services, ponzi schemes, and ransomware suppliers are among the most pervasive offenders.
In light of recent sanctions against other established services used for money laundering, such as Tornado Cash, these results highlight the rise of the “cross-chain problem” – an issue identified by Elliptic earlier this year and one that is prevalent across the crypto space and poses a key risk for virtual asset services and criminal investigators.
According to previous investigations conducted by Elliptic, the RenBridge platform has been used by criminals to launder over $540 million in illicit cryptoassets. RenBridge is a cross-chain bridge that enables users to transfer assets across multiple blockchains.
The most recent results show that criminals are increasingly using cross-asset and cross-chain transactions to hide their activities from conventional blockchain analytics systems. In its study on the dangers of virtual assets, published in June of 2022, the Financial Action Task Force (FATF) first raised the issue of money laundering via chain hopping.
The report’s abstract reads, “The State of Cross-chain Crime: Countering the New Age of Crypto Crime and Money Laundering in a Cross-chain World are:
Approximately $1.2 billion in stolen cryptocurrency via DeFi or exchange thefts has been traded on DEXs, representing more than a third of all stolen cryptocurrency from the instances studied.
“Coin swap” services, which enable users to trade assets inside and between blockchains without creating an account, have been used to launder an additional $1.2 billion in criminal assets. Numerous cybercrime services are promoted in Russian online underground communities, where they attract nearly entirely illegal users.
Increased cross-chain and cross-asset obfuscation by sanctioned, seized, and terrorist groups is an increasing issue. More than $1.8 billion has been laundered through wallets linked to organisations later sanctioned by the United States, including those used by North Korea to conduct multi-million-dollar cyberattacks.
Elliptic uses case studies and primary data to discuss the illegal usage of decentralised exchanges, cross-chain bridges, and currency swap services.
Elliptic introduced comprehensive screening in response to the rising dangers of cross-asset and cross-chain crime, which enables the tracking of cryptoassets across and across all blockchains and assets simultaneously.
With Holistic Screening, firms can accomplish cross-chain compliance quickly and at scale, without having to conduct time-consuming and error-prone multi-asset investigations. In exchange, they are given access to automated risk analytics.
