A visitor holds a souvenir Bitcoin. A blockchain analysis company said in a report that RenBridge has helped criminals launder $540 million in cryptocurrency. File Photo by Maxim Shipenkov/EPA-EFE
Aug. 11 (UPI) -- An unregulated cryptocurrency cross-chain bridge used to transfer the value between blockchains facilitated the laundering of at least $540 million in proceeds for lawbreakers, according to a new report by a company that analyzes blockchain tools and exchanges.
Elliptic Connect said in its report this week that the cross-chain bridge RenBridge has helped criminals to grab $153 million in ransomware proceeds alone.
RenBridge is part of a network of decentralized cross-chain bridges that are unregulated alternatives to exchanges for transferring value between blockchains.
"Cross-chain bridges allow crypto assets to be transferred between blockchains, without going through a centralized service such as an exchange," Elliptic Connect said in the report. "Billions of dollars in assets have been transferred between Bitcoin, Ethereum and other blockchains-- using bridge services such as Portal, cBridge and Synapse."
The movement of criminal proceeds through blockchains, called "chain-hopping," has been been used by cybercriminals as a way to evade being traced.
While exchanges can be used anonymously, most legitimate exchanges are regulated in most jurisdictions in case of law enforcement investigations.
"Decentralized cross-chain bridges provide unregulated alternatives that are being embraced by cybercriminals," Elliptic Connect said.
"Our analysis of cross-chain transactions using Elliptic's new Nexus technology shows that one cross-chain bridge in particular -- RenBridge -- has been used to launder at least $540 million in crypto assets originating from theft, fraud, ransomware and various other types of criminal activity since 2020."
The Treasury Department on Monday sanctioned crypto mixer Tornado Cash over laundering concerns, barring all U.S. citizens from interacting with it and requiring that U.S. assets belonging to Tornado Cash be reported to the Office of Foreign Assets Control.
The department accused Tornado Cash with laundering more than $7 billion worth of virtual currency since its creation in 2019.
"Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks," Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said in a statement.
"Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them."