New Age of Cryptocrime; how criminals have evolved – a detailed report

by Arthur · October 5, 2022

Table of Contents

Covered:

New Age Crypto Crime
4 billion laundered

New Age Crypto Crime

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

The studytitled “The state of cross-chain crime” talked about the new era of cryptocrime and how criminals have evolved with the development of technology.

4 billion dollars laundered

Elliptic’s research focused on three web3 products, namely decentralized exchanges (DEX), cross-chain bridges and coin exchange services.

With bridges and exchange services at their disposal, cybercriminals have been able to hide a trail of $4 billion originating from illegal activities.

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

Decentralized exchanges

Stolen crypto from DeFi exploits worth $1.2 billion has made its way to DEXs to be exchanged for another asset. This accounts for over a third of the crypto exploits examined for the report.

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

Coin exchange and bridges

Furthermore, cybercriminals have been able to launder an additional $1.2 billion using coin exchange services. This involves exchanging assets within and across blockchains, without having to register for an account. These services are especially popular with bad actors.

Cross-chain bridges are also used by criminals to obfuscate their illegal activities by adding a layer of anonymity, making it difficult to track transactions.

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

Matter of concern

This misuse of technology is not just limited to individual hackers looking for a lucky payday. Bridging and exchange services have made it easier for sanctioned as well as terrorist entities to mask their activities and continue to siphon people’s funds.

Proceeds from cyber attacks originating in North Korea have been laundered through such services. The estimated amount is somewhere around 1.8 billion dollars.

In the Virtual Assets report published earlier this year in June, the Financial Action Task Force considered the increasing use of cross-chain bridges in money laundering, calling it a high-risk issue.

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 $1,000.

*This article originally appeared in AMB Crypto