1. BITBILIHome
  2. Article

Crime displacement from mixers to cross-chain bridges following crackdown

• 323 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

  • Crypto industry unites as SEC targets Binance and Coinbase

    TL;DR Breakdown SEC files lawsuits against Binance and Coinbase, sparking industry backlash. Professionals criticize the agency’s overreach and unclear regulations. The agency’s actions might push crypto firms towards more crypto-friendly jurisdictions. Turbulence has engulfed the crypto world, as the U.S. Securities and Exchange Commission (SEC) has taken the surprising action of launching lawsuits against Binance and Coinbase, two of the largest cryptocurrency exchanges globally. This sudden move has sparked widespread reaction from industry insiders, raising concerns about the impact these actions may have on crypto innovation in the United States. Industry Insiders React to SEC’s Actions On one hand, there is palpable frustration from industry professionals who are witnessing what they see as an overstep from the SEC. Kristin Smith, CEO of the Blockchain Association, described the agency’s approach as unacceptable, emphasizing that they do not make the law. She pointed out that these measures distract from substantive policy efforts as the industry and Congress work towards effective regulation. Smith expressed concern that the SEC is trying to circumvent formal processes and prevent public engagement by listing assets this way….

    Article 2023年6月12日

  • Tether blacklists scammer after $20 million theft

    TL;DR Breakdown Tether has blacklisted a wallet belonging to a scammer who stole $20 million worth of USDT. The growing trend of zero transfer phishing scams. Description On August 1, a scammer successfully executed a zero transfer phishing attack, stealing $20 million worth of USDT (Tether’s stablecoin) before being blacklisted by the issuer, Tether. The incident was reported by on-chain analytic firm PeckShield, shedding light on the growing concern about such scams in the crypto ecosystem. Tether froze the wallet after detecting … Read more On August 1, a scammer successfully executed a zero transfer phishing attack, stealing $20 million worth of USDT (Tether’s stablecoin) before being blacklisted by the issuer, Tether. The incident was reported by on-chain analytic firm PeckShield, shedding light on the growing concern about such scams in the crypto ecosystem. Tether froze the wallet after detecting the theft The victim of the scam, with the wallet address 0x4071…9Cbc, intended to send money to the address 0xa7B4BAC8f0f9692e56750aEFB5f6cB5516E90570. However, due to the scammer’s intervention, the funds were sent to a phishing address, 0xa7Bf48749D2E4aA29e3209879956b9bAa9E90570. The scam unfolded when the…

    Article 2023年8月2日

  • Curve Finance CEO cleared in crypto fraud lawsuit

    TL;DR Breakdown Curve Finance CEO Michael Egorov has been cleared by a California judge in a crypto fraud lawsuit. Lawyers confident of their chances in Swiss courts. Description A lawsuit filed by three venture capital firms against the CEO of Curve Finance, Michael Egorov, has been rejected by a California judge, citing concerns over the venue. The venture capital firms, ParaFi Capital, Framework Ventures, and 1kx, had accused Egorov of involvement in a scheme to defraud them. They alleged that Egorov misappropriated trade … Read more A lawsuit filed by three venture capital firms against the CEO of Curve Finance, Michael Egorov, has been rejected by a California judge, citing concerns over the venue. The venture capital firms, ParaFi Capital, Framework Ventures, and 1kx, had accused Egorov of involvement in a scheme to defraud them. They alleged that Egorov misappropriated trade secrets and defrauded them of nearly $1 million while misleading them with the promise of a possible stake in Curve Finance. Curve Finance CEO was accused of defrauding investors The lawsuit was filed in the Superior Court of California…

    Article 2023年9月9日

  • Ripple CTO breaks silence revealing startling timeline secrets

    TL;DR Breakdown Ripple’s Chief Technology Officer (CTO), David “JoelKatz” Schwartz stated that the delay should not be considered uncommon given the complex nature of the legal proceedings. John E Deaton’s tweet suggests that the timeline for the Ripple case is not unprecedented, as other cases before Judge Torres have also taken a significant amount of time to receive a ruling. Schwartz’s statement reflects a calm and measured attitude toward the situation, reminding the community that judicial processes can be time-consuming, especially when dealing with complex matters that have far-reaching consequences.  Description Ripple‘s Chief Technology Officer (CTO), David “JoelKatz” Schwartz, recently responded to a tweet by John E Deaton regarding the extended delay in the Ripple case decision. Schwartz acknowledged the frustration felt by many who are eagerly awaiting a ruling on the summary judgment motions in the case. However, he cautioned against jumping to conclusions or … Read more Ripple‘s Chief Technology Officer (CTO), David “JoelKatz” Schwartz, recently responded to a tweet by John E Deaton regarding the extended delay in the Ripple case decision. Schwartz acknowledged the frustration felt…

    Article 2023年7月12日

  • Here is how UK can actually tackle inflation

    TL;DR Breakdown UK can tackle inflation by adjusting monetary policy and potentially raising interest rates. Increase taxes for the better-off to drive out inflation. Advocate for a more balanced housing policy to stabilize the market. Address missed opportunities to invest in infrastructure during periods of low interest rates. Description Inflation, like an uninvited guest, is making itself felt in the UK, affecting everyday finances, right from interest rates to mortgage repayments. While this is a headache for most, for some, it’s business as usual. This uneven distribution of pain makes it clear that the current monetary policy isn’t doing enough to quickly combat inflation. … Read more Inflation, like an uninvited guest, is making itself felt in the UK, affecting everyday finances, right from interest rates to mortgage repayments. While this is a headache for most, for some, it’s business as usual. This uneven distribution of pain makes it clear that the current monetary policy isn’t doing enough to quickly combat inflation. Rebalancing housing policies A key area that’s been disproportionately affected is the housing market. It’s a market segment…

    Article 2023年7月10日
TOP