The cryptocurrency market faces a new threat: a sharp increase in crypto laundering through cross-chain swaps. A recent report by Elliptic highlights this issue.
Crypto Laundering and Cross-chain Swaps
According to Elliptic, instances of crypto laundering through cross-chain swaps have increased by 211% over the past two years, potentially reaching $21.8 billion by 2025. Initially designed to enhance liquidity in decentralized finance, cross-chain swaps are being exploited to launder money by obscuring the traces of transactions.
Criminal Methods: Evolving Approaches
Criminals, including North Korean hacker groups, are adopting sophisticated methods to conceal their operations. They engage in multi-hop and structured chain-hopping, complicating fund tracking. This presents significant challenges for investigators, often requiring tracking across multiple networks.
Combating Crypto Crime and the Role of Analysts
Blockchain analytics firms like Elliptic are combatting crypto crime by developing tools to monitor cross-chain flows and identify suspicious activities. Utilizing advanced technologies, they enable tracking of funds and detection of associated addresses, which is crucial for law enforcement.
The rise in crypto laundering through cross-chain swaps poses a significant challenge to the integrity of the crypto ecosystem. Understanding the methods of criminals and supporting analytical tools can help secure a safer future for cryptocurrencies.
