The increasing use of “cross-chain bridge services” – which transfer cryptocurrency from one blockchain to another, bypassing any centralized entity like an exchange – has made it more difficult to track cryptocurrency payments, particularly with regard to money laundering. Just one of these services, RenBridge, is said to have laundered over $500 million in proceeds of crime.
This is according to a recent report by Elliptical, which provides cryptocurrency monitoring and compliance solutions. He noted that the volume of transactions on these bridges has increased since October 2020, and although the most recent peak seems to be last January, hundreds of millions of dollars of transactions are still taking place regularly. The report suggests that much of this activity is directly linked to criminal activity, noting that this has started to happen as crypto exchanges have become more regulated.
Analysis by the company revealed that one cross-chain bridge in particular, RenBridge, has been used to launder at least $540 million worth of crypto-assets from theft, fraud, ransomware, and other types of exploits. criminal activity since 2020. He also said RenBridge is a significant enabler for Russia-linked ransomware gangs, with more than $153 million in ransom payments laundered through the service to date.
Stolen cryptocurrency constitutes the largest portion of illicit activity believed to be laundered through RenBridge, accounting for 49.2% of known proceeds, followed by:
- Payments from ransomware attacks, at 28.4%;
- The mysterious “other” at 10.8%;
- Money from Ponzi schemes, at 9%;
- Dark Net Markets at 2.1%; and,
- Credit cards stolen at 0.5%.
Although the use of cross-chain bridges has made the cryptocurrency more difficult to track, the report says it is not impossible as there remains a high level of transparency in the industry. However, this usually involves lengthy manual searches. Elliptic recently released software that provides automation solutions for such surveys.