Crypto criminals transmit their digital tokens around many blockchains to launder their proceeds of crime, avoiding centralized systems that may track and block their transactions.
For this, they employ cross-chain bridges like RenBridge, which, according to blockchain analytics company Elliptic, has reportedly been used to launder at least $540 million in cryptocurrencies since 2020.
Ransomware payments of $153 million are included in this sum, and RenBridge is described as “a crucial facilitator” of such crimes.
Cross-chain bridges, in the words of David Carlisle, vice president of policy and regulatory affairs at Elliptic, are “a bit of a godsend and a curse.”
They contribute to the market’s expansion by offering new methods to transact, like many other well-known crypto products. In particular, cross-chain bridges are essential for the growth of the decentralized finance, or DeFi, field.
They are, however, “ungoverned and very susceptible to hackers or being exploited for crimes like money laundering.”
Tom Robinson, chief scientist of Elliptic, stated that “cross-chain bridges constitute a weakness in the regulatory structure that has been meticulously created by governments throughout the world to prevent cryptocurrency laundering.”
In the next six to twelve months, Carlisle anticipates that authorities will concentrate on bridges as countries continue to take action against the shadowy portions of the cryptocurrency industry.