Illicit cross-chain transfers expected to grow to $10B: Here's how to prevent them
Improved blockchain analytics will become increasingly important to combat the use of cross-chain bridges for illicit means, which are estimated to surpass $10 billion in value by 2025.
Blockchain analytics firm Elliptic forecasts a 60% rise in the value of illicit cryptocurrency laundered through cross-chain bridges from $4.1 billion in June 2022 to $6.5 billion next year. This figure is projected to double midway through the decade.
Cross-chain crime has been a major talking point in 2022 with over $2 billion fleeced in hacks targeting cross-chain bridges. Aside from these bridges and their contracts being targeted, these bridges have also become an avenue for criminals to launder cryptocurrency. A prime example is an unknown hacker moving stolen funds from the now bankrupt FTX using cross-chain bridges.
Cointelegraph unpacked the findings of research released by Elliptic in correspondence with senior cryptocurrency threat analyst Arda Akartuna.
The Elliptic analyst explained that billions of dollars in assets have been transferred between Bitcoin, Ethereum and other blockchains using bridge services such as Portal, cBridge and Synapse. Decentralized cross-chain bridges offer an unregulated alternative to exchanges for transferring value between blockchains.
Related: After FTX: Defi can go mainstream if it overcomes its flaws
While some bridges are used legitimately, Akartuna noted that the tools have emerged as a key facilitator in money laundering. ‘Chain-hopping’, or moving proceeds of crime between blockchains, has long been used to evade tracing efforts by exchanging cryptocurrency assets through decentralized or anonymous exchanges.
As blockchain surveillance, enforcement and regulatory efforts have improved, criminals
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