A recent report from blockchain surveillance firm Elliptic has uncovered that $7 billion in “illicit or high-risk funds” has been laundered through decentralized exchanges (DEXs), cross-chain bridges, and non-KYC exchanges.
This staggering sum was already reached by July of this year, exceeding Elliptic’s prediction from last year that such activities would amount to $6.5 billion by the end of 2023.
The report highlighted the increasing complexity of these illicit activities, with criminals adopting more complex for making cross-chain transfers, including derivatives trading and limit orders on exchanges, to obscure their money laundering operations.
Over the span of one year, from July 2022 to July 2023, approximately $2.7 billion was laundered using these methods, the report said.
Notably, the North Korean Lazarus Group has been identified as a major contributor to this illicit activity.
According to Elliptic, the Lazarus Group ranks as the top source of illicit funds laundered through cross-chain bridges.
It is also the third-largest source of cross-chain crime overall, and is responsible for approximately 1/7th of all cross-chain crime tracked by Elliptic.
This group has managed to launder over $900 million through cross-chain methods alone, the report said.
Commenting on the rising trend in cross-chain crime, Elliptic said digital assets other than Bitcoin (BTC) are becoming increasingly popular among cybercriminals.
For instance, some digital assets, such as the privacy coin Monero (XMR) are better suited for criminals because they have stronger privacy built-in on the base layer, while for instance stablecoins like DAI are popular because they maintain a stable value against fiat currencies.
The firm added that cross-chain activities are popular because most cross-chain services like bridges have no know-your-customer (KYC) requirements, unlike centralized exchanges.
“These bad actors can therefore make their activities difficult to trace by engaging in prolific asset- or chain-hopping,” the firm said.