Criminals have laundered at least $4 billion in illegal cryptocurrency using decentralized exchanges, bridges that enable asset transfers between different blockchains, and coin exchange services, according to a new study.
Around $1.2 billion worth of digital assets have been laundered through decentralized exchanges or peer-to-peer marketplaces without intermediaries, a report by crypto compliance firm Elliptic said on Tuesday.
According to the report, an additional $1.2 billion worth of illicit crypto proceeds were laundered using coin exchange services, which allow users to trade their coins often anonymously.
Additionally, the inter-chain bridge RenBridge has been used to launder over $540 million in illicit crypto, the report writes.
While these services generally have legitimate use cases, allowing traders and investors to more efficiently move funds within and between blockchains, they have been increasingly adopted by criminals, analysts noted. ‘Elliptical.
The lack of anti-money laundering measures on these platforms means that “criminals face little resistance when using them for malicious purposes,” Elliptic analysts wrote.
In August, the US Treasury Department’s Office of Foreign Assets Control sanctioned Tornado Cash, which allows users to conduct private crypto transactions. The platform had been used to launder more than $7 billion worth of cryptocurrencies since its inception in 2019, the agency said.