Cryptocurrency and Cybercrime: A Growing Concern
Cybercriminals have reportedly exploited cryptocurrencies, decentralized exchanges (Dexs) and blockchain cross-chain infrastructures to clean roughly $7 billion of compromised or high-risk capital, as discovered by a research conducted by Elliptic. A notorious digital crime group, rumoured to be funded by North Korea, named The Lazarus Group, is reportedly involved in approximately $900 million worth of such cross-chain crimes.
Utilizing Dexs and Cross-Chain Bridges for Illicit Purposes
From July 2022 to July 2023, cybercriminals have reportedly capitalized on cross-chain and cross-asset services to launder a whopping $7 billion of compromised or high-risk capital, as per Elliptic’s recent research. This figure overshoots Elliptic’s forecast of $6.5 billion for the entirety of 2023.
On October 5, Elliptic released a press statement noting that the recent amount of assets laundered through Dexs, cross-chain bridges and coin exchanges left the previous year’s $4.1 billion figure in the dust. According to Tom Robinson, a co-founder and chief scientist at Elliptic, the crime rate connected to cross-chain services appears to be on a steady rise. It is also believed that cybercriminals are taking full advantage of the decentralized and pseudo-anonymous nature of Dexs, cross-chain bridges and coin exchanges.
Wide Spread of Assets by Malevolent Entities
As per the press statement by Elliptic, The Lazarus Group, believed to be sanctioned by North Korea, leads in cross-chain crimes amounting up to $900 million. The statement also indicates that unauthorized entities have reportedly spread out their assets across over 26 different blockchains, holding over 80 different asset types. The Lazarus Group, reportedly involved in major hacking incidents previously, is suspected to have escaped with digital assets worth $200 million in a particular instance.
Through its analysis, Elliptic has observed an interesting pattern. It appears that malevolent entities such as The Lazarus Group have been making efforts to muddy the waters regarding the transit of funds before they are exchanged for fiat currency. This is done through the implementation of complex methods including but not limited to, derivatives trading and limit orders.
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Frequently asked Questions
Q1: What are Dexs and Crypto Cross-Chain Services?
A1: Dexs, short for decentralized exchanges, are platforms that enable the peer-to-peer exchange of cryptocurrencies without the need for intermediaries. Crypto cross-chain services, on the other hand, facilitate the transfer of digital assets between different blockchain networks.
Q2: How do Dexs and Crypto Cross-Chain Services enable cybercriminals to launder money?
A2: Dexs and Crypto Cross-Chain Services provide cybercriminals with anonymity and the ability to transfer funds across multiple cryptocurrencies and blockchains, making it difficult to trace the origin and destination of the illicit funds. This makes money laundering easier for cybercriminals.
Q3: How much money has been laundered using Dexs and Crypto Cross-Chain Services?
A3: According to Elliptic, a blockchain analytics firm, approximately $7 billion has been laundered using Dexs and Crypto Cross-Chain Services.
Q4: What makes Dexs and Crypto Cross-Chain Services attractive for money laundering?
A4: The decentralized nature of Dexs and Crypto Cross-Chain Services makes it challenging for authorities to regulate and monitor transactions. Additionally, the ability to transfer funds across various cryptocurrencies and blockchains further complicates the detection of illicit activities.
Q5: Can law enforcement agencies track money laundered through Dexs and Crypto Cross-Chain Services?
A5: While it is challenging to track money laundered through Dexs and Crypto Cross-Chain Services, blockchain analytics firms like Elliptic are working with law enforcement agencies to develop tools and techniques to identify illicit transactions and trace the flow of funds.
Q6: What steps can be taken to prevent money laundering through Dexs and Crypto Cross-Chain Services?
A6: Regulatory measures that focus on enforcing know-your-customer (KYC) and anti-money laundering (AML) regulations can help deter money laundering through Dexs and Crypto Cross-Chain Services. Additionally, increased collaboration between blockchain analytics firms, exchanges, and law enforcement agencies is crucial in identifying and combating illicit activities.
Q7: Are there any legitimate uses for Dexs and Crypto Cross-Chain Services?
A7: Yes, Dexs and Crypto Cross-Chain Services have legitimate use cases, such as enabling decentralized trading and providing liquidity across different blockchain networks. However, it is essential to strike a balance between innovation and ensuring the prevention of illicit activities.