Cross-chain bridges have been the subject of numerous attacks this year, but according to new information from Elliptic, Renbridge was allegedly used to launder almost $500 million in illicit cryptocurrency assets.
A study from August 10 claims that RenBridge, a cryptocurrency bridge, has helped to launder at least $540 million in criminal proceeds since 2020 via chain hopping, which is the process of changing one cryptocurrency into another and moving it across numerous blockchains.
Cross-chain bridges offer an “unregulated alternative” to exchanges for transferring wealth between blockchains, according to the blockchain forensics company.
Decentralized cross-chain bridges, according to Elliptic, offer “a free-floating alternative to exchanges for transferring currency between blockchains.”
Hacker groups and rogue states
Cross-chain bridges, also known as blockchain bridges, allow users to move cryptocurrency easily between blockchain networks and are mostly utilized for legal purposes.
The bridge protocol, which is locked within a contract, is often used by users to deposit their tokens from one chain. After doing so, the user receives the equivalent of a parallel token in the other chain.
Elliptic pointed out that these bridges have also been utilized by hackers, ransomware gangs, and exploiters to launder criminal proceeds, with RenBridge being responsible for at least $540 million in such proceeds since 2020.
According to the company, the cross-chain bridge was most recently used to transfer at least $2.4 million in crypto assets stolen on Aug. 2 during the Nomad attack.
Elliptic also pointed out that in the previous two years, assets from decentralized finance (DeFi) services worth at least $267.2 million have been cleaned up using RenBridge, and a portion of the $80 million allegedly stolen by North Korea from Liquid Global Exchange last year also went through RenBridge.
The Conti ransomware group, which is well-known for attacking the Costa Rican government in June, has also so far used RenBridge to launder more than $53 million.
Elliptic pointed out that the use of blockchain bridges like RenBridge makes it difficult for law enforcement to crack down on people and organizations that are abusing the new technology.
“Blockchain bridges such as RenBridge pose a challenge to regulators since there is no central service provider that facilitates these cross-chain transactions,” it said.
The Financial Action Task Force (FATF) noted growing concerns related to “chain hopping,” especially in the DeFi domain, in a status report released on June 30:
“The rapid growth and evolution of the Defi sector is a cause for concern as it could cause risks to accelerate and proliferate.”