The laundering of at least $540 million in criminal proceeds has reportedly been made possible by the crypto bridge RenBridge since 2020 through a practice known as chain hopping, which involves changing one cryptocurrency into another and transporting it across numerous blockchains.
Decentralized cross-chain bridges, according to Elliptic, offer “an unregulated alternative to exchanges for transferring value between blockchains.”
Hacker groups exploit RenBridge
Elliptic further stated that in the last two years, assets from decentralized finance (DeFi) businesses worth at least $267.2 million have been laundered through RenBridge. Furthermore, a chunk of the $80 million stolen from the Liquid Global exchange last year, reportedly by North Korea, has been traced back to the bridge.
Cross-chain bridges, also known as blockchain bridges, are mostly utilized for legitimate purposes, allowing users to exchange cryptocurrency effortlessly across blockchain networks.
Users often deposit tokens from one chain to the bridge protocol, which is locked into a contract, after which the user receives the equivalent of a parallel token in another chain.
Elliptic pointed out that hackers, ransomware gangs, and exploiters have also utilized these bridges to launder criminal proceeds, with RenBridge being responsible for at least $540 million since 2020.
Most recently, the company claims that at least $2.4 million in crypto assets that were lost in the Nomad bridge hack on Aug. 2 passed over the cross-chain bridge.
The Conti ransomware group, known for its attack on the Costa Rican government in June, has also used the bridge to launder almost $53 million.
Growing concerns
Elliptic observed that blockchain bridges like RenBridge provide difficulty to authorities attempting to crack down on individuals and groups utilizing the nascent technology for illegal purposes.
The Financial Action Task Force (FATF) highlighted increased risks linked with “chain hopping,” particularly in the DeFi space, in its June 30 status report.