Soaring crypto crime: Over $7 billion laundered

A report from crypto risk management expert Elliptic reveals an alarming rise in money laundering via decentralized exchanges, cross-chain bridges and cryptocurrency exchange services, with a staggering total of $7 billion laundered.

Dramatic rise in crypto theft through DEXs

Earlier this month, Elliptic, a company specializing in cryptocurrency risk management, has published a report highlighting the impressive growth of the cryptocurrency laundering via inter-chain exchanges. This strategy has become popular with many cybercriminals. Recent figures show an astonishing track record, surpassing even forecasts.

Initially, the forecast was $4.1 billion, with a forecast of $6.5 billion by the end of 2023, rising to $10.5 billion by 2025. However, Elliptic indicates a sudden growth in money laundering via inter-chain exchanges, calling into question these earlier estimates.

At the time, we estimated that this $4.1 figure would rise to $6.5 billion by the end of 2023 and $10.5 billion by 2025. Our latest calculation of $7 billion shows, however, that cross-chain crime is growing at a faster rate than expected.

Statement by former director

Laundering via these exchanges is based primarily on the transfer of cryptocurrencies between different tokens and blockchains. Criminals use this method to disguise illegally obtained funds, including through scams and crypto theft.

Stablecoins: Hackers’ preferred option

Elliptic has identified two major factors fuelling the increase in inter-chain criminal activity. First, criminals are increasingly turning to cryptocurrencies alternatives to Bitcoin, favoring those offering anonymity and stability.

Stablecoins, backed by government-backed currencies, are gaining in popularity due to these attributes. Tara Annison former head of crypto technical consulting at Elliptic pointed out that criminals now prefer to use Tether (USDT) and USD Coin (USDC) for their ease of acquisition.

It should be noted that the share of Bitcoin (BTC) in illegal activities has fallen sharply, from 97% in 2020 to 19% in 2022. The report also highlights an increased adoption of cross-chain strategies by criminals to avoid the authorities and camouflage their ill-gotten gains.

This trend is exacerbated by legislative initiatives that increasingly focus on traditional facets of crypto-crime, consequently encouraging fraudsters to consider cross-chain crime as a viable alternative.

The alarming rise of cross-chain crime represents a trend that is not only recent, but also worrying. In the first half of 2022, thefts orchestrated via inter-chain bridges climbed significantly, registering a 58% increase compared to the same period in 2021, and this trend persists and is spreading.

The meteoric rise in inter-chain crime is a recent but worrying trend. In the first half of 2022, thefts facilitated by cross-chain bridges climbed by 58% compared with 2021, showing a trend that is taking a lasting hold.