By George Ward
With cryptocurrency increasingly becoming popular among the younger generation, which forms the bulk of its users, the number of malicious participants will likely increase in the coming years.
In a new report titled “Following the Money in a Cross-Chain World,” released by the blockchain analytic firm, Elliptic, the growth of the blockchain industry over the years will become the trigger for more theft.
As a result, Elliptic forecasted that crypto criminals will, over the years, launder a whopping $10.5 billion by 2025. According to the report, the blockchain analytics firm identified more than $4.1 billion of high-risk crypto assets that criminals have laundered.
The report further stated that decentralized exchanges (DEXs), some cross-chain bridges, and coin swap service providers facilitated these money laundering activities. Using the above data, Elliptic said illicitly laundered crypto assets would spike in value by almost 60%, from $4.1 billion in 2022 to $6.5 billion in 2023.
The blockchain tracking platform added, “the amount will likely shoot up to $10.5 billion by 2025, with an upward estimate of close to $15 billion.”
The report also emphasized the rapid increase in cross-chain criminal activities by revealing that more than $500 million was moved in 2020 through DEXs and its sister platforms, compared to $4.1 billion in mid-2022.
Arda Akartuna, the platform’s lead threat expert, stated, “services like DEXs, cross bridges, and coin swap enterprises have been mostly used to process legitimate transactions. But they have also accommodated bad actors seeking ways to move the proceeds of their crimes.”
In addition, Akartuna noted that the blockchain technology tracking tools that law enforcement agencies adopt to trace cross-chain activities adequately have failed. Therefore, this often hinders investigations and gives criminals a considerable advantage.
Moving Stolen Crypto Funds
The most notable and infamous money laundering saga in the crypto industry in 2022 was the case involving Tornado Cash, a crypto mixing platform. Tornado Cash was a collaborator in the attacks on an Ethereum blockchain bridge by the North Korean hacking unit, the Lazarus Group.
It is alleged that the crypto mixer received 75% of the stolen funds to facilitate that laundering move. Various on-chain data shows that hackers have stolen over $2.5 billion in attacks on crypto-based protocols in the first three-quarters of the year.
However, the exploits’ success rate dropped 43 percent during the third quarter of 2022 as platforms improved their security. Still, attacks continued to take place after the Lazarus Group incident.
Binance Smart Chain (BSC) also suffered a massive loss after hackers attacked its cross-chain bridge in early October. Furthermore, the decentralized finance (DeFi) sector has been the target of attacks by hackers due to the billions of dollars worth of transactions processed in that space.
For example, in April alone, there have been a record 31 major incidents, with attacks taking place at an average of one per day. The digital asset industry has lost billions of dollars’ worth of crypto assets as hackers continue to target the sector.