The growing use of “cross-chain bridge services” — which transfer cryptocurrency from one blockchain to another, bypassing any centralized entities like an exchange — has made it more difficult to track cryptocurrency payments, especially where it concerns money laundering. One such service alone, RenBridge, is believed to have laundered over $500 million in criminal proceeds.
This is according to a recent report from Elliptic, which provides cryptocurrency monitoring and compliance solutions. It noted that transaction volume on these bridges has risen since October 2020, and while the most recent peak seems to be this past January, hundreds of millions of dollars worth of transactions still take place regularly. The report suggested that much of this activity is linked directly with criminal activity, noting that this began happening as crypto exchanges became more regulated.
An analysis by the company found that one cross-chain bridge in particular, RenBridge, has been used to launder at least $540 million in cryptoassets originating from theft, fraud, ransomware and other types of criminal activity since 2020. It also said RenBridge is an important facilitator for Russia-linked ransomware gangs, with over $153 million in ransom payments laundered through the service to date.
Purloined cryptocurrency makes up the biggest portion of illicit activity said to be laundered through RenBridge, accounting for 49.2% of known proceeds, followed by:
While the use of cross-chain bridges has made cryptocurrency more difficult to track, the report says it is not impossible because there remains a great deal of transparency in the sector. Doing so, however, usually involves long manual searches. Elliptic recently released software that provides automation solutions for such investigations.
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