Criminals have used decentralized exchanges (DEX), cross-chain bridges and coin swap services to launder more than US$4 billion worth of illicit crypto gains, according to a research report by blockchain analytics firm Elliptic.
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- A DEX is a peer-to-peer marketplace where transactions occur directly between crypto traders; a cross-chain bridge is a protocol that allows users to transfer assets and information between different independent blockchain networks; and a coin swap refers to a tool for a pair of coins’ direct conversion of an exchange rate without having an account.
- About US$1.2 billion in cryptocurrencies stolen from DeFi or exchanges have been exchanged using DEXs, which accounts for more than a third of all surveyed crypto stolen events, the report said.
- Another US$1.2 billion in illicit assets was laundered via coin swap services, the report said.
- A cross-chain bridge called RenBridge laundered more than US$540 million in illicit crypto assets.
- In a June report, the global money laundering combating organization Financial Action Task Force (FATF) said they have noticed the growing cross-chain bridges and are keeping an eye on the risks posed by peer-to-peer transactions.
- FATF also pointed out in the report that about one-third of the 53 jurisdictions had not yet begun to introduce the “travel rule” for crypto to legislation, after extending the rule to crypto transfers for three years.
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