1. BITBILIHome
  2. Article

Crime displacement from mixers to cross-chain bridges following crackdown

• 218 views

TL;DR Breakdown

  • The crypto crime game has taken on new heights, one dance law enforcers and crypto criminals will be at for a long time.
  • Crypto criminals have shifted from the mixers, after the US-led enforcement actions and sanctions, to cross-chain solutions to advance their money laundering activities.
  • The Lazarus groups’ recent activities shed light on the shift from Mixers crime to cross-chain crime

Description

Law enforcement and fights against crime are often a race between the criminals and the enforcers. The race may require more tactics for the other party to win or outrun the other. For instance, too many restrictions in one jurisdiction may prompt criminals to shift their operations to another jurisdiction, referred to as ‘Crime displacement.’ … Read more

Law enforcement and fights against crime are often a race between the criminals and the enforcers. The race may require more tactics for the other party to win or outrun the other. For instance, too many restrictions in one jurisdiction may prompt criminals to shift their operations to another jurisdiction, referred to as ‘Crime displacement.’

This is common in physical crimes. However, it has now proven to be more rampant in the crypto ecosystem as criminals are shifting from the mixers, after the US-led enforcement actions and sanctions, to cross-chain solutions to advance their money laundering activities.

Cross-chain crime: The new form of crypto crime 

According to Elliptic, almost all stolen crypto was laundered on cross-chain bridges in June and July, indicating a complete shift from 2022, where mixers were mainly used. For instance, the Lazarus group, a cyberhacking organization with strong links to North Korea for its notorious activities in the crypto ecosystem, was recently ascertained to have stolen $240 million in digital assets from four entities and a suspected hack on CoinEX. 

The group was known to use the Mixer Tornado Cash to advance their activities. The group has now shifted to the Avalanche Bridge after the Tornado Cash crackdown by the US government. 

US sanctions and crackdowns on non-compliant exchanges, primarily based in Russia, have caused most offenders to shift to cross-chain crime, which entails swapping assets across blockchains to hide their trails. It has escalated immensely since 2021 with the rise of decentralized finance. A cross-chain bridge is a DeFi protocol where launderers can swap assets without the Know Your Customer requirements, making it almost impossible for them to trace.

The sudden shift can be traced to the Tornado cash mixer crackdown between July and September 2022, followed by a brief shift back to mixers after the RenBridge shutdown, which the collapsed Alameda Research financed along FTX. 

According to data by Eliptic, the Ren Bridge was used to launder over $500 million worth of crypto assets at the time of its operation. Criminals then shifted to cross-chain bridges in February 2023 after the EUROPOL-led seizure of Bitcoin ChipMixer.After the seizure, Mixer use in crypto laundering has significantly decreased as more criminals now prefer cross-chain bridges.

Why criminals are shifting to cross-chain activity

Criminals prefer using cross-chain bridges for several reasons. The first obvious one is due to the enforcement imposed on Mixers by the US government, making cross-chain solutions their method of choice in furtherance of crime.

The second is due to the fact that criminals are also aware that blockchain analytics solutions do not have a way to track illegal activity across blockchains in a scalable and programmatic manner. Cross-bridge solutions are mainly designed with a single asset mind, such as Ether, making them the crime displacement option of choice for their activities.

The other reason is crypto crime is now shifting to newer assets, such as DeFi protocol-specific assets, which can only be exchanged on these cross-chain solutions. Decentralized exchanges, coin swap services, and cross-chain bridges do not also require the KYC requirements, making them more suitable for advancing crypto crimes as users can conceal their identity. 

Cross-chain crime is rising ahead of projections and is likely to dominate in money laundering due to the increased crime displacement effect.

All is not lost, as there are still several solutions law enforcement officers can use to track cross-chain crimes at scale. Holistic blockchain analysis is one method compliance professionals can utilize; numerous companies have already begun developing solutions that law enforcement officers can use to curb these crimes. These solutions can identify crypto assets on numerous blockchains simultaneously in just a few clicks.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

文章来源于互联网:Crime displacement from mixers to cross-chain bridges following crackdown

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年9月20日 23:29
Next 2023年9月21日 03:05

Related articles

  • The U.S. is never going into recession – Here is why

    TL;DR Breakdown U.S. Treasury Secretary, Janet Yellen, asserts the U.S. economy is on a good path and doesn’t expect a recession. U.S. is controlling inflation effectively and the labor market remains strong despite global concerns. No immediate plans for U.S. tariff reductions as part of efforts to normalize relations with China. Description As global markets continually adjust to fluctuating economic conditions, there is a palpable fear of a looming recession. However, it seems the U.S. has found a way to keep such economic downturns at bay. The country’s economic fortitude, highlighted by Treasury Secretary Janet Yellen’s recent optimistic comments, paints a picture of an American economy not … Read more As global markets continually adjust to fluctuating economic conditions, there is a palpable fear of a looming recession. However, it seems the U.S. has found a way to keep such economic downturns at bay. The country’s economic fortitude, highlighted by Treasury Secretary Janet Yellen’s recent optimistic comments, paints a picture of an American economy not only weathering international financial turmoil but also setting the stage for continued growth. U.S. is…

    Article 2023年7月18日

  • McDonald’s makes an iconic display in the metaverse

    TL;DR Breakdown McDonald’s has created its first Web3 experience called McNuggets Land in The Sandbox to celebrate Chicken McNuggets’ 40th anniversary. Participants can play games, complete quests, and win both virtual and real-world rewards, including year-long Chicken McNuggets coupons. McDonald’s venture into the metaverse is part of a larger trend of businesses using virtual spaces for brand-building and customer engagement. Description Basking in the glows of a digital sun, an iconic fast food giant sets its mark in the infinite expanse of the metaverse. McDonald’s is leading the industry by venturing into the Web3 realm, where it has crafted an immersive and engaging experience for its Hong Kong audience, all in honor of a milestone – … Read more Basking in the glows of a digital sun, an iconic fast food giant sets its mark in the infinite expanse of the metaverse. McDonald’s is leading the industry by venturing into the Web3 realm, where it has crafted an immersive and engaging experience for its Hong Kong audience, all in honor of a milestone – the 40th anniversary of the beloved…

    Article 2023年7月22日

  • European Union advances its Data Act despite crypto community backlash

    TL;DR Breakdown The European Union has pushed forward with its Dat Act despite an outcry from the crypto community. The crypto community shows concern over the new bill. Description In a significant development, European Union (EU) lawmakers have reached an agreement to advance the highly debated European Data Act, marking a milestone in reshaping the digital space, according to EU Commissioner for Internal Markets, Thierry Breton. The act, which focuses on the fair use of industrial data and aims to remove barriers to the … Read more In a significant development, European Union (EU) lawmakers have reached an agreement to advance the highly debated European Data Act, marking a milestone in reshaping the digital space, according to EU Commissioner for Internal Markets, Thierry Breton. The act, which focuses on the fair use of industrial data and aims to remove barriers to the sharing of data generated by various data-centered services, has faced criticism from the crypto community. European Union lawmakers set to finalize the bill Initially passed by the European Union Parliament on March 14, negotiations among European Union lawmakers…

    Article 2023年7月1日

  • Australia inflation drops to 4.9%, strengthens argument to extend pause

    TL;DR Breakdown Australia’s inflation rate dropped to 4.9% in July, fueled by reduced holiday travel and fuel costs. Markets predict a 99.5% likelihood that the Reserve Bank of Australia (RBA) will not increase interest rates for the third consecutive month in September. Australian dollar and bond futures responded to lower-than-expected inflation figures, indicating a more nuanced economic situation. Description In July, inflation in Australia dropped to its lowest point of 4.9% in 17 months, mainly due to reduced holiday travel and fuel costs. Even the core inflation measure, which looks at essential price changes, showed a decrease, which suggests that there might not be a need to increase interest rates. Consequently, the markets adjusted … Read more In July, inflation in Australia dropped to its lowest point of 4.9% in 17 months, mainly due to reduced holiday travel and fuel costs. Even the core inflation measure, which looks at essential price changes, showed a decrease, which suggests that there might not be a need to increase interest rates. Consequently, the markets adjusted their expectations and now believe with a 99.5%…

    Article 2023年8月30日

  • Balancer escapes major hack, but $2.8 million still at risk following vulnerability discovery

    TL;DR Breakdown Balancer detected a critical vulnerability across eight blockchains, initially risking $11.7 million; most of the risk was mitigated quickly. Experts praised Balancer’s swift response, but $2.8 million remains at risk after liquidity providers withdrew over $200 million. The incident has prompted discussions about transparency in the crypto community and may influence the development of layer-2 scaling solutions. Description In a close call that could have resulted in a catastrophic event for the decentralized finance (DeFi) protocol, Balancer has warned that $2.8 million remains at risk following the discovery of a critical vulnerability on August 22.  As per the announcement on August 24, users are urged to “withdraw as soon as possible” if they … Read more In a close call that could have resulted in a catastrophic event for the decentralized finance (DeFi) protocol, Balancer has warned that $2.8 million remains at risk following the discovery of a critical vulnerability on August 22.  As per the announcement on August 24, users are urged to “withdraw as soon as possible” if they have linked their wallets to the affected…

    Article 2023年8月25日
TOP