As per the CNBC report, criminals used the cross-chain bridge RenBridge to launder more than $540 million since 2020, in crimes related to crypto cash, reported blockchain analytics firm Elliptic.
This includes a staggering $153 million in ransomware payments. It means that hackers have been leveraging RenBridge as they break into corporate networks and force companies to pay in crypto in order to get back their data. As per Elliptic, the cross-bridge platform RenBridge has been an important facilitator to ransomware platforms linked to Russia.
Elliptic’s vice president of policy and regulatory affairs David Carlisle refers to these cross-chain bridges as a blessing as well as a curse. He states that on one hand, these bridges expand the market by offering another platform to transact. He adds that cross-chain bridges are vital to the development of overall DeFi space.
The flipside is, “they’re effectively ungoverned, and so very vulnerable to hacks, or to being used in crimes like money laundering,” said Carlislie.
Regulation of Crypto Bridges
Carlislie believes that regulators will start cracking down on crypto bridges over the next 12 months. The latest news comes a day after the U.S. Treasury sanctioned the use of crypto mixer Tornado Cash. Reportedly, Tornado Cash laundered more than $7 billion since 2019.
Carlislie adds: “One major question is whether bridges will become subject to regulation since they act a lot like crypto exchanges, which are already regulated”.
The Elliptic report notes that RenBridge has become a popular destination for crypto criminals to launder crypto assets via acts of fraud, theft, ransomware, and other criminal activities. It also adds that crypto assets laundered via RenBridge were likely stolen by North Korea.
Elliptic notes that more than $267 million was stolen from exchanges and DeFi services through RenBridge over the last two years.
“Cross-chain bridges are a loophole in the regulatory regime that has been painstakingly established by governments around the world, to combat crypto laundering. Ransomware gangs, fraudsters and even North Korean hackers are shifting from regulated crypto exchanges to a decentralized, unregulated alternative,” said Tom Robinson, Elliptic’s chief scientist.
Last week, crypto-bridge Noman lost more than $200 million in a major exploit. Soon after, thieves started using RenBridge to launder money.
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