Cross-chain crimes reaches a record of $7 billion

[TravelMug]

According to the reports of Elliptic,

The value of illicit crypto laundered through cross-chain crime has reached a record $7 billion, new figures published today by Elliptic can reveal.

Cross-chain crime refers to the swapping of cryptoassets between different tokens or blockchains – often in rapid succession and with no legitimate business purpose – to obfuscate their criminal origin. Known also as “chain-” or “asset-hopping”, cross-chain crime is on course to become the dominant means of laundering cryptoassets.

Of course, there is still the traditional way of hiding everything through mixers, but now they are using sophisticated methods as well and now they are called cross-chain crime.

And North Korea's Lazarus group alone, have laundered over $900 million using this method to hid their trail.



https://www.elliptic.co/blog/record-7-billion-in-crypto-laundered-through-cross-chain-services

And theft is the predominant activities that this criminals do, and then followed by scammers/ponzi schemes.

Just crazy numbers though and it's going to be very difficult to catch them at hand as there are new methods to hide or obfuscated their origin.

[Poker Player]

I am not surprised, it is cybercrime adapting to the new possibilities that the growing cryptocurrency market offers. Twenty years ago there were no cryptocurrencies and the illicit money was laundered through corporate schemes in tax havens. For medium amounts, they could be laundered with a business where cash payment was the most common, which was the traditional method, already used in Al Capone's time, for example, at a time when credit cards did not exist.

The world changes, and criminals adapt to it.

[zasad@]

I mentioned this several times, that when traces of a crime remain on the blockchain, any researcher can then find the criminals and transfer the data to the police. Blockchain is not the best way to hide traces of crimes, but in any new trend there will always be a lot of fraud and hacking, because a perfect system cannot be built the first time.

[YOSHIE]

According to the reports of Elliptic,

We have often seen and heard of crypto as a field for money laundering or criminal activity, there are probably hundreds of articles out there that state and discuss this, not only Elliptic, Several other sources can easily be found on view, therapy from the many negative responses to crypto crimes, 0% that I see are dealing with the law, whether the statement is just a joke or indeed crypto is blunt from legal action.

I think anything related to the internet and actions or activities carried out digitally can easily be used illegally, the more sophisticated the technology, the more sophisticated the crimes that can be committed, Basically, for me, I remain optimistic and positive about Bitcoin as long as it can be used for good purposes and does not conflict with existing electronic laws.

[yhiaali3]

Just crazy numbers though and it's going to be very difficult to catch them at hand as there are new methods to hide or obfuscated their origin.

Yes, just numbers. Such statistics cannot be trusted because it is very difficult to track all the methods that criminals follow. They are always developing new methods of concealment.
Of course, the value of stolen coins can be known and tracked, but this is impossible if they are laundered on bridges and decentralized exchanges, as the report states:

DEXs: decentralized services – often running on smart contracts – that allow cross-asset swaps on the same blockchain.

Cross-chain bridges: services that are typically decentralized that allow cross-chain swaps across assets on different blockchain platforms.

Coin swap services: centralized and typically anonymous services that allow exchanges between different assets without the need to create an account or submit identity verification.

This means that the stolen coins will enter one of these decentral services and then another clean coin will exit on a different network. These stolen coins will enter the new network as clean coins. How can we distinguish between them in this case?

[zasad@]

DEXs: decentralized services – often running on smart contracts – that allow cross-asset swaps on the same blockchain.

Cross-chain bridges: services that are typically decentralized that allow cross-chain swaps across assets on different blockchain platforms.

Coin swap services: centralized and typically anonymous services that allow exchanges between different assets without the need to create an account or submit identity verification.

This means that the stolen coins will enter one of these decentral services and then another clean coin will exit on a different network. These stolen coins will enter the new network as clean coins. How can we distinguish between them in this case?

Decentralized services are not mixers that cannot be tracked. And most of these services are perfectly monitored by security companies, which will then transfer the data to Interpol. Tornado Cash is closed, although many criminal coins passed through it. But this does not mean that the criminals will not be caught.

[stompix]

~Tornado Cash is closed

Really?
How did that happen, or more importantly, how do you shut down a smart contract?
https://u.today/tornado-cash-reigns-supreme-on-ethereum

I wonder how this happened two months ago month when you say tornado cash is closed:
https://cointelegraph.com/news/anubis-dao-rug-pull-money-washes-away-on-tornado-cash

[Baofeng]

I am not surprised, it is cybercrime adapting to the new possibilities that the growing cryptocurrency market offers. Twenty years ago there were no cryptocurrencies and the illicit money was laundered through corporate schemes in tax havens. For medium amounts, they could be laundered with a business where cash payment was the most common, which was the traditional method, already used in Al Capone's time, for example, at a time when credit cards did not exist.

The world changes, and criminals adapt to it.

Yes, and as I have said before, this criminals are very smart, from the very history, they know how to outsmart the authorities. Although sooner or later the authorities are going to caught up with them.

In this case, not only they used used mixer, and as we all know, authorities might be watching every crypto mixer right now and see if criminals are using it to launder their money. So the have to devise a new plan how to outsmart them by using cross-chain method and hopping.

@stompix - maybe @zazad is referring to this one? https://tornado.cash

But I do agree that tornado cash contract is immutable.

[Husires]

These are new accusations to create a legal background to ban Cross-chain exchange and a way for decentralized one, or at least restrict them and arrest their developers, as they are the prevailing means of laundering crypto-assets.
Cross-chain platforms are centralized platforms that do not require identity and therefore it is easy for governments to set regulatory frameworks on them and thus prevent tokens and all investments related to them. If these platforms do not become decentralized (I cannot find an open source way to do this), it is a matter of time before issuing legal legislation against them.

[yhiaali3]

These are new accusations to create a legal background to ban Cross-chain exchange and a way for decentralized one, or at least restrict them and arrest their developers, as they are the prevailing means of laundering crypto-assets.
Cross-chain platforms are centralized platforms that do not require identity and therefore it is easy for governments to set regulatory frameworks on them and thus prevent tokens and all investments related to them. If these platforms do not become decentralized (I cannot find an open source way to do this), it is a matter of time before issuing legal legislation against them.

Yes, I agree with you on this point. Since I read this study, I feel that this is the purpose of it, since centralized exchanges have become almost completely under the control of the government, so they will now go to accuse these decentralized services to form the appropriate legal ground to enact legislation against them.

Of course, there are some decentralized services that are already used to launder money, but not all of them. Additionally, if they enact laws to ban these services, criminals will find other ways to continue their work. Criminals are constantly evolving their methods before and after Crypto.

[zasad@]

~Tornado Cash is closed

Really?
How did that happen, or more importantly, how do you shut down a smart contract?
https://u.today/tornado-cash-reigns-supreme-on-ethereum

I wonder how this happened two months ago month when you say tornado cash is closed:
https://cointelegraph.com/news/anubis-dao-rug-pull-money-washes-away-on-tornado-cash

I meant that the project is officially closed, the developer is preparing for the trial, which should be next year, if I'm not mistaken.
But you are right that a smart contract cannot be closed; if it is already running, it will continue to work. But all wallets that work with this smart contract will be marked as criminal.

[TravelMug]

These are new accusations to create a legal background to ban Cross-chain exchange and a way for decentralized one, or at least restrict them and arrest their developers, as they are the prevailing means of laundering crypto-assets.
Cross-chain platforms are centralized platforms that do not require identity and therefore it is easy for governments to set regulatory frameworks on them and thus prevent tokens and all investments related to them. If these platforms do not become decentralized (I cannot find an open source way to do this), it is a matter of time before issuing legal legislation against them.

If that is the case then maybe these new legal background by regulators are going to used against this cross-chain crimes as the numbers are really staggering.

I am not surprised, it is cybercrime adapting to the new possibilities that the growing cryptocurrency market offers. Twenty years ago there were no cryptocurrencies and the illicit money was laundered through corporate schemes in tax havens. For medium amounts, they could be laundered with a business where cash payment was the most common, which was the traditional method, already used in Al Capone's time, for example, at a time when credit cards did not exist.

Yes, Swiss Banks are the haven for criminals back then in the 70's-2000's as they can hide behind the bank secrecy law until US forces them to open the bank accounts for Americans.

I mentioned this several times, that when traces of a crime remain on the blockchain, any researcher can then find the criminals and transfer the data to the police. Blockchain is not the best way to hide traces of crimes, but in any new trend there will always be a lot of fraud and hacking, because a perfect system cannot be built the first time.

Yes, everything is traceable in the blockchain, and that's why this criminals are trying to get around with it, hiding thru various methods. Initially it was mixer, then authorities goes and shut down some of them. And now criminals learn another method by cross-chain and it reaches record numbers.

For sure if ever this criminals will be caught and cannot hide anymore from this tactic, there will be more far advance and sophisticated method that will come up in the future.

[Fiatless]

Yes, everything is traceable in the blockchain, and that's why this criminals are trying to get around with it, hiding thru various methods. Initially it was mixer, then authorities goes and shut down some of them. And now criminals learn another method by cross-chain and it reaches record numbers.

For sure if ever this criminals will be caught and cannot hide anymore from this tactic, there will be more far advance and sophisticated method that will come up in the future.

Just like mixer and tumbler, cross-chain services can be used for genuine privacy purposes but they are been abused by criminals. Governments especially in the US are also becoming technologically advanced in the detecting, investigating, and prosecuting of these crypto criminals. In recent years different agencies such as the Darknet Marketplace Digital Currency Crimes Task Force and Virtual Asset Exploitation Unit have been established in the US to fight crypto-related crimes.  So as these criminals are getting smarter the government is also stepping up their game to be ahead of them.

[TravelMug]

Yes, everything is traceable in the blockchain, and that's why this criminals are trying to get around with it, hiding thru various methods. Initially it was mixer, then authorities goes and shut down some of them. And now criminals learn another method by cross-chain and it reaches record numbers.

For sure if ever this criminals will be caught and cannot hide anymore from this tactic, there will be more far advance and sophisticated method that will come up in the future.

Just like mixer and tumbler, cross-chain services can be used for genuine privacy purposes but they are been abused by criminals. Governments especially in the US are also becoming technologically advanced in the detecting, investigating, and prosecuting of these crypto criminals. In recent years different agencies such as the Darknet Marketplace Digital Currency Crimes Task Force and Virtual Asset Exploitation Unit have been established in the US to fight crypto-related crimes.  So as these criminals are getting smarter the government is also stepping up their game to be ahead of them.

Yeah, it might be true that the government are stepping up and putting a lot of pressures on this criminals. But it seems that they are always one step of the game, but like the dark web, or the silk road, it took years for the US government to really shut it down for good. And so it proliferated, drugs, guns, anything illegal is there, you can buy it anonymously.

And then they go after bitcoin tumbler and mixer, it's no secret, CM was top on the list, established in 2017 and it takes them another 6 years to bring them down as well. But then many grows like mushroom and for sure it might be years before we will here another mixer shutting down. But they are not going to wait for it, criminals are taking advantage of cross-chain and hide again.

[hugeblack]

Although cross-chain and mixers provide an option to enhance privacy, they are centralized in the sense that there is no guarantee that these services will delete your records, or at least have a point of failure that will make it easy for governments to find the developers and shut down the service, just as happened with CM after years later of running mixer.

No matter the size of the money laundering, it is easy to trace compared to cash and traditional methods
I almost hear the name North Korea's Lazarus group in all the dark activities. I don't know if this group is really influential or if it is false media reports.

[NotATether]

Yes, everything is traceable in the blockchain, and that's why this criminals are trying to get around with it, hiding thru various methods. Initially it was mixer, then authorities goes and shut down some of them. And now criminals learn another method by cross-chain and it reaches record numbers.

For sure if ever this criminals will be caught and cannot hide anymore from this tactic, there will be more far advance and sophisticated method that will come up in the future.

Just like mixer and tumbler, cross-chain services can be used for genuine privacy purposes but they are been abused by criminals. Governments especially in the US are also becoming technologically advanced in the detecting, investigating, and prosecuting of these crypto criminals. In recent years different agencies such as the Darknet Marketplace Digital Currency Crimes Task Force and Virtual Asset Exploitation Unit have been established in the US to fight crypto-related crimes.  So as these criminals are getting smarter the government is also stepping up their game to be ahead of them.

"Mixer" is not even listed on this graph. It does not mean that nobody is using mixers for crime, but it does indicate that the number of people who are trying to launder money with a mixer is much less than the bridges and exchanges that people are trying to use for that purpose.

That is because these services support multiple cryptos which your average criminal can find simple to comprehend how to bounce money back and forward. While a mixer usually supports only one type of cryptocurrency, usually Bitcoin.