$7 billion in illicit funds laundered across multiple blockchains in 2023: Report

Crypto crimes which take place across multiple blockchains are rising at a faster rate than predicted, said Elliptic’s report

October 06, 2023 11:10 am | Updated 11:11 am IST

‘The State of Cross-chain Crime’ report this year marked an increase of almost $3 billion when compared to 2022 [File]

‘The State of Cross-chain Crime’ report this year marked an increase of almost $3 billion when compared to 2022 [File] | Photo Credit: REUTERS

Illicit or high-risk crypto-asset funds worth around $7 billion have been laundered via conversions across multiple blockchains, said the cryptocurrency analytics platform Elliptic in its October report.

‘The State of Cross-chain Crime’ report this year marked an increase of almost $3 billion when compared to 2022, with Elliptic noting that the spike in cross-chain crimes had gone past its annual predictions despite only being calculated through July this year. Elliptic had predicted that only $6.5 billion in illicit or high-risk funds would be laundered across blockchains by the end of the year.

Additionally, the increase in cross-chain crime took place despite the lowered prices of cryptocurrencies and crypto-assets.

“Bitcoin is no longer the only cryptoasset available, and tens of thousands of other cryptoassets now exist. Many have features particularly attractive to criminals, such as being anonymous (privacy coins such as Monero) or stable in value due to being pegged to government-backed currency (stablecoins such as Tether (USDT) or DAI),” said Elliptic’s report.

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The company also pointed out that many decentralised finance (DeFi) services which convert crypto assets do not ask for ID verification or legal information, so they are popular with criminals moving stolen funds. Some services include decentralised exchanges (DEXs), cross-chain bridges, and coin swap platforms largely based in Russia.

These crypto-assets are harder to track down when they move across blockchains through unregulated conversion channels, so the perpetrators are rarely caught. Terrorist organisations have also used crypto wallets and have over 80 assets spread across more than 26 blockchains, as per the report.

“The Lazarus Group — a North Korean cyberhacking organization — is singularly the largest source of all illicit funds laundered through cross-chain bridges and the third largest source of all cross-chain crime overall, having laundered over $900 million through cross-chain methods,” said Elliptic.

The analytics company stressed that DeFi platforms are also used for legal activities, like making investments or playing games.

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