Elliptic, a crypto intelligence firm, has published an interesting blog post on the use, or abuse of, cross-chain bridges to launder funds.
A cross-chain bridge allows value to hop to different blockchains. While utilized by legitimate platforms, cross-chain bridges have also caught the attention of crypto criminals. With a cross-chain bridge there is no centralized provider and transactions are processed via “darknodes” enabling “chain hopping.”
According to Elliptic, RenBridge has laundered $540 million of pilfered funds, including $153 million from a North Korean ransomware campaign. The recent Nomad hack has also been a beneficiary of the RenBridge. RenBridge is transaction agnostic charging a fee for the service that requires a minimum transfer value of $10 but an unlimited maximum. According to RenBridge’s Terms of Service, it is organized under the laws of the Cayman Islands.
Elliptic notes that while a growing number of crypto exchanges fall under regulation, cross chain bridges do not. These bridges enable illicit gains to be laundered with RenBridge being quite popular with the criminal class.
Elliptic joined the research with the announcement that its new Holistic Screening Capability (launched this week) empowers regulators etc. to track these chain hopping transactions. The cat and mouse game continues.