Cross-Chain Crypto Laundering Reaches $7B: Elliptic
Crypto risk management firm Elliptic revealed the total amount of illicit funds laundered through decentralized exchanges (DEXs), cross-chain bridges and coin swap services has soared to $7 billion.
“Our latest figures suggest that it is fast becoming the preferred money laundering method for a range of cybercrimes,” the report stated.
Cross-Crime Crypto Laundering Exceeds Predicted Growth
A recent report shows that the latest data has exceeded Elliptic’s earlier predictions:
“We estimated then 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, however, shows that cross-chain crime is rising at a faster rate than predicted.”
Crypto money laundering predominantly involves the act of swapping cryptos between different tokens and blockchains, a phenomenon often referred to as cross-chain criminal activity.
The state of cross-chain crime by predicate offense and service used. Source: Elliptic
People use this method to conceal funds acquired through various means, including scams and crypto thefts.
Additionally, it acknowledges that its earlier estimate of $10.5 billion may no longer hold true, as the rates are currently exceeding the initial predictions.
Elliptic highlights two factors contributing to the rise in cross-chain criminal activities.
Firstly, criminals are increasingly gravitating towards cryptos other than Bitcoin. These cryptos offer attractive features like anonymity and stability, often achieved through their connection to government-backed stablecoins.
At the time of publication, Bitcoin’s price is $27,821.
Bitcoin Price Chart 1 Month. Source: BeInCrypto
However, the report indicates that criminals are adopting cross-chain strategies to outwit authorities. This is to keep their ill-gotten gains hidden and to stay ahead of law enforcement:
“Furthermore, as we revealed elsewhere recently, enforcement actions such as seizures and sanctions are increasingly targeting traditional frontiers of crypto criminality. This is causing a so-called “crime displacement” effect, in which fraudsters and criminals are turning to cross-chain crime as an alternative.”
BeInCrypto previously reported that the rise of cross-chain crime is a new but swiftly growing trend. During the first half of 2022, there was a notable 58% surge in thefts facilitated by cross-chain bridges when compared to the same period in 2021.