In a recent report, crypto risk management firm Elliptic has unveiled a startling trend in the world of cybercrime. The report highlights the growing preference among cybercriminals for laundering illicit funds through decentralized exchanges (DEXs), cross-chain bridges, and coin swap services, culminating in a staggering total of $7 billion in laundered funds.

Elliptic’s report states, “Our latest figures suggest that it is fast becoming the preferred money laundering method for a range of cybercrimes.”

Exceeding Predictions: Cross-Crime Crypto Laundering on the Rise

What’s particularly alarming is that the latest data has exceeded Elliptic’s earlier predictions. The firm initially estimated that this form of illicit activity would amount to $4.1 billion, with projections of $6.5 billion by the end of 2023 and $10.5 billion by 2025. However, the latest calculation of $7 billion reveals that cross-chain crime is rising at a much faster rate than anticipated.

Crypto money laundering primarily involves the act of swapping cryptocurrencies across different tokens and blockchains, commonly referred to as cross-chain criminal activity. Criminals employ this method to obscure the origins of their ill-gotten gains, acquired through various means such as scams and crypto thefts.

Two Key Factors Driving the Surge in Cross-Chain Crime

Elliptic highlights two significant factors contributing to the surge in cross-chain criminal activities.

Firstly, cybercriminals are increasingly drawn to cryptocurrencies other than Bitcoin. They favor cryptocurrencies that offer features like anonymity and stability, with stablecoins pegged to government-backed currencies gaining popularity.

Notably, Bitcoin’s share in criminal blockchain activity has dwindled over the years. In 2022, Bitcoin accounted for only 19% of illicit volume within blockchain activity, a sharp contrast to 2020 when it constituted a whopping 97%.

Tether (USDT) and USD Coin (USDC) have become favorites among criminals due to their ease of acquisition, according to Tara Annison, Elliptic’s former head of technical crypto advisory.

However, the report suggests that criminals are adopting cross-chain strategies to outsmart authorities. They are using these methods to keep their illicit gains hidden and stay one step ahead of law enforcement.

Elliptic’s report also highlights a concerning trend: the “crime displacement” effect. As enforcement actions such as seizures and sanctions target traditional avenues of crypto criminality, fraudsters and criminals are increasingly turning to cross-chain crime as an alternative.

This emerging trend underscores the need for enhanced vigilance and regulatory measures to combat the growing menace of cross-chain crypto laundering. As the crypto landscape continues to evolve, it is imperative to stay ahead of cybercriminals’ innovative tactics to ensure a secure and trustworthy ecosystem.