As the world of crypto continues to evolve, so too do the methods employed by criminals to launder illicit funds. A recent report by Elliptic sheds light on the alarming surge in crypto money laundering, with a staggering $7 billion in suspicious or high-risk funds already laundered through cross-chain and cross-asset platforms.
Data presented in the report underscores the urgency of addressing the growing threat of financial crimes in the crypto space.
The Complex Web Of Cross-Chain Criminal Activity
Elliptic’s report delves into the intricate tactics employed by criminals to obscure their money laundering activities. The use of decentralized exchanges (DEXs), cross-chain bridges, and coin swap services has become increasingly prevalent.
Over the period from July 2022 to July 2023, approximately $2.7 billion was laundered through these channels. Notably, these illicit actors are adopting more sophisticated techniques, such as derivatives trading and limit orders, to further conceal their activities.
Among the prominent entities engaged in this nefarious activity, the Lazarus Group stands out. This cybercriminal collective, also known as the Guardians of Peace or Whois Team, has laundered over $900 million through cross-chain bridges, making them the third-largest contributor to the burgeoning cross-chain crime landscape.
The Lazarus Group is believed to have connections to the North Korean government and has been linked to a series of cyberattacks dating back to 2010. The exact size of their membership remains shrouded in mystery, but their impact on the world of crypto money laundering is undeniable.
Crypto Money Laundering’s Evolving Nature
Elliptic’s comprehensive blockchain analytics reveal the extent of cross-chain criminal activity. Sanctioned entities and even terrorist groups have diversified their digital assets, spanning more than 80 different types of assets across more than 26 blockchains. This diversification has allowed them to further elude detection and scrutiny.
Dr. Tom Robinson, co-founder, and chief scientist at Elliptic, emphasized the firm’s commitment to mitigating risk and promoting transparency within the crypto ecosystem. The introduction of innovative insights through Holistic blockchain analytics has enabled Elliptic to uncover the persistent growth of cross-chain crime.
Bad actors continue to exploit decentralized exchanges (DEXs), cross-chain bridges, and coin swap services, highlighting the need for enhanced regulation and vigilance in the crypto industry.
The crypto world’s rapid evolution presents both opportunities and challenges. While it has enabled innovation and financial inclusion, it has also become a haven for money launderers and cybercriminals.
The alarming $7 billion figure underscores the urgency for regulators, businesses, and the crypto community to collaborate in developing robust safeguards against these evolving threats, ensuring the long-term integrity of the digital financial landscape.
Featured image from Adobe Stock
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