Home Business Cybercriminals Laundered $540 Million Using RenBridge, Elliptic Says

Cybercriminals Laundered $540 Million Using RenBridge, Elliptic Says

0
Cybercriminals Laundered $540 Million Using RenBridge, Elliptic Says

Dan Kitwood | Getty Images

One of the primary ways criminals in the crypto world launder money is by sending digital assets across blockchains, bypassing a centralized service that can track and freeze transactions.

They use what are called cross-chain bridges to achieve this, and the dollar amounts become significant. A particular cross-chain bridge called RenBridge has been used to launder at least $540 million in crime-related cryptocurrency since 2020, according to new research from blockchain analytics firm Elliptic.

This amount includes $153 million in ransomware payments, which means hackers are using RenBridge when breaking into corporate networks and forcing companies to pay to recover their data. Elliptic says RenBridge was “a significant enabler” for Russian-linked ransomware gangs.

David Carlisle, vice president of policy and regulatory affairs at Elliptic, said cross-chain bridges are “a bit of a blessing and a curse” at the moment. Like so many popular crypto tools, they help expand the market by giving people more ways to pay and transact. Cross-chain bridges are notably vital for the development of decentralized finance, or DeFi, the space, which is the crypto alternative to the banking system.

The flip side is that “they are effectively ungoverned, and therefore very vulnerable to hacks, or being used in crimes like money laundering,” Carlisle told CNBC.

Carlisle said he expects regulators to start focusing on bridges over the next six to 12 months as governments continue to crack down on the darker corners of the crypto world.

On Monday, the Treasury Department blacklisted the crypto mixing service Tornado Cashalleging the service has been used to launder more than $7 billion worth of virtual currency since 2019. Carlisle said actions taken by the Treasury’s Office of Foreign Assets Control show US regulators are prepared to prosecute criminal behavior in crypto.

“A major question is whether bridges will be subject to regulation, as they act much like crypto exchanges, which are already regulated,” Carlisle said.

The developers have built cross-chain bridges to allow users to send tokens from one chain to another. Transfers of digital assets between chains rely on black knots, or networks of thousands of pseudonymous validators. This has allowed them to become a tool of choice for concealing crypto money.

RenBridge has become a popular destination for doing just that. Elliptic says it has been used to launder assets from theft, fraud, ransomware, and various other types of criminal activity.

Other crypto assets laundered on RenBridge were likely stolen by North Korea, Elliptic said. The service has also been used by Conti cybercrime group, which recently attacked the government of Costa Rica and triggered a national state of emergency. Elliptic’s research shows that Conti laundered over $53 million through RenBridge.

“Cross-chain bridges are a loophole in the regulatory regime that has been painstakingly established by governments around the world to combat crypto laundering,” said Tom Robinson, chief scientist at Elliptic.

RenBridge is a go-to option for anyone looking to clean up stolen cash. More than $267 million in crypto assets from DeFi exchanges and services have been laundered through RenBridge in the past two years, including $33.8 million from Japanese crypto exchange Liquid, according to Elliptic.

Bridges are particularly vulnerable to attack.

blockchain cybersecurity company Previously rated CertiK that when bridges hold hundreds of millions of dollars in assets in escrow and multiply their possible attack vectors by operating on two or more blockchains, they become prime targets for hackers.

Last week, a bridge known as the Nomad lost nearly $200 million in a devastating exploit resulting from a bug. Within hours, thieves began using RenBridge to launder money. So far, $2.4 million in crypto assets stolen from Nomad have been sent through RenBridge, according to Elliptic.

“Ransomware gangs, scammers and even North Korean hackers are moving from regulated crypto exchanges to a decentralized, unregulated alternative,” Robinson said.

RenBridge is an open protocol, so it does not work with a CEO or central figureheads. CNBC contacted support email address listed on Ren’s Crunchbase profile to request a comment.

LOOK: This crypto winter should be less severe and of shorter duration

LEAVE A REPLY

Please enter your comment!
Please enter your name here