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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Fast facts

  • 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.

See related article: Chainalysis says $2 bln stolen in cross-chain bridge hacks, rogue states involved