Crypto Money Laundering on Cross-Chain Bridges Surges 138% Year-on-Year in 2023, According to Chainalysis
Cybercriminals are turning to cross-chain bridges to move illicit funds, according to market intelligence platform Chainalysis.
Cross-chain bridges enable users to transfer crypto assets from one blockchain to another.
In a new report, Chainalysis says the amount of crypto that bridge protocols received from illicit addresses increased from just $312.2 million in 2022 to $743.8 million in 2023, representing a year-on-year increase of 138%.
“Illicit actors’ use of bridge protocols for money laundering purposes grew substantially in 2023, particularly amongst crypto thieves.”
Chainalysis says money laundering tactics are changing, citing that while a big share of crypto laundering activities still involve sending the stolen assets to exchanges, the most sophisticated criminals are now using other platforms such as bridges and mixers.
The report says that the North Korea-sponsored gang of cybercriminals known as the Lazarus Group are among the bad actors that use bridges to move illicit funds.
“Crypto criminals with more sophisticated on-chain laundering skill sets —such as the notorious North Korean cybercriminals associated with hacking gangs like Lazarus Group — tend to utilize a greater variety of crypto services and protocols.
North Korea-affiliated hackers have been among those to utilize bridges for money laundering the most.”
In 2022, the Lazarus Group stole $100 million in cryptocurrency from Horizon, the cross-chain bridge of Ethereum rival Harmony (ONE). Chainalysis details how the gang laundered the funds.
“Funds associated with the 2022 Harmony hack moved to a popular bridge protocol in May 2023, where they were moved from the Bitcoin blockchain to the Avalanche blockchain. The funds were then swapped for a stablecoin, and then bridged again using a different protocol, this time from the Avalanche blockchain to the TRON blockchain.”
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Filed under: Bitcoin - @ February 17, 2024 12:40 am