Criminals targeting the cryptocurrency market are laundering money by sending digital assets across blockchains. It bypasses a centralized service that can trace and halt such transactions.
Cyber Criminals' New Crypto Scam
According to CNBC, cybercriminals use cross-chain bridges for money laundering, and the amounts are getting large.
One cross-chain bridge called RenBridge has been used by criminals to launder $540 million in crime-related crypto cash since 2020, according to blockchain analytics firm Elliptic.
Included in that amount is $153 million in ransomware payments, meaning cryptocurrency criminals are using RenBridge when they break into corporate networks and force companies to pay up to get their data back.
According to Elliptic, RenBridge was an important facilitator for ransomware gangs from Russia.
Also Read : Justice Department Launches First-Ever Criminal Case Involving Crypto to Skirt US Sanctions
Elliptic's vice president of policy and regulatory affairs, David Carlisle, said that cross-chain bridges are both a blessing and a curse.
Just like a lot of many crypto tools, the cross-chain bridges can help expand the market by giving people more ways to pay and transact.
Cross-chain bridges are important to developing decentralized finance, crypto's alternative to the banking system.
The downside of cross-chain bridges is that they are ungoverned and very vulnerable to hacks and any cybercrimes.
Carlisle added that he expects regulators to begin zeroing in on bridges in the next 6 to 12 months as governments continue to crack down on the darkest corners of the cryptocurrency market, according to CoinDesk.
Crypto Service Used to Launder Crypto
On Monday, Aug. 8. the Treasury Department blacklisted Tornado Cash, a crypto mixing service. The department said that the service was used to launder more than $7 billion worth of virtual currency since 2019.
Carlisle added that the action taken by the Treasury Department's Office of Foreign Assets Control shows that US regulators are prepared to go after cybercriminals targeting cryptocurrency.
One concern is whether bridges will become subject to regulation since they act like crypto exchanges, which are already regulated.
Developers have built cross-chain bridges to let customers send tokens from one chain to another. Transfers of digital assets between chains rely on Darknodes or networks of thousands of validators with nicknames. That has allowed them to become a tool for laundering crypto cash.
RenBridge became a popular bridge to do that. Elliptic says it has been used to launder assets from fraud, theft, ransomware, and other types of criminal activity.
Other crypto assets laundered across the bridge were likely stolen by North Korea, according to Elliptic. The cybercrime group Conti also used the service, which recently attacked the Costa Rican government and triggered a national state of emergency.
Elliptic's also showed that Conti had laundered $53 million via RenBridge, according to AltFi.
Tom Robinson, Elliptic's chief scientist, said that cross-chain bridges are a "loophole in the regulatory regime" that governments have established to try and combat crypto laundering.
RenBridge has become a go-to option for those looking to clean stolen money. More than $267 million in crypto assets taken from DeFi services were laundered via RenBridge since 2020, including $33.8 million from crypto exchange Liquid.
Related Article: CryptoWatch: 2022 Top Coins Not Affected by Hacks? Cryptocurrency Crimes Reach $14b Record
This article is owned by Tech Times
Written by Sophie Webster
