Criminals Laundered $540M Through RenBridge: Report
Blockchain analytics firm Elliptic has claimed that over $540 million in illicit funds have been laundered through the decentralized cross-chain service RenBridge over the past two years.
Key Takeaways
- According to blockchain analytics firm Elliptic, the cross-chain bridge RenBridge has been used to launder over $540 million over the past two years.
- Elliptic's vice president of policy and regulatory affairs, David Carlisle, has said he believes regulators will soon start cracking down on cross-chain bridges.
- The firm's claims come two days after the U.S. Treasury sanctioned Tornado Cash's decentralized privacy protocol for allegedly facilitating money laundering.
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Elliptic’s vice president of policy and regulatory affairs, David Carlisle, has said that he expects regulators to start cracking down on cross-chain bridges in the next six months to a year.
RenBridge Reportedly Used to Launder Over $540M
Elliptic has claimed that criminals use RenBridge and other cross-chain bridges to launder money and cover their tracks on-chain.
In a Wednesday CNBC interview, Elliptic’s vice president of policy and regulatory affairs, David Carlisle, said that the cross-chain bridge RenBridge has been used to launder at least $540 million in illicit crypto proceeds over the last two years, including over $153 million that allegedly originated from ransomware payments.
Carlisle said that he thinks regulators will begin zeroing in on cross-chain bridges in the next six to 12 months. “One major question is whether bridges will become subject to regulation since they act a lot like crypto exchanges, which are already regulated,” he said.
Cross-chain bridges form a core part of the blockchain ecosystem. They’re used to move assets from one blockchain to another through reliance on centralized custodians or decentralized autonomous protocols. RenBridge is a decentralized bridge created by Ren. It lets users move many assets across nine supported networks and is one of the most popular protocols for “chain hopping”—moving funds across multiple chains to obfuscate their source—because it doesn’t rely on a centralized entity that can censor or freeze transactions to custody funds.
Elliptic has claimed that RenBridge has been used by notorious cybercrime syndicates, including the North Korean state-sponsored Lazarus Group and the suspected Russia-based cybercrime group behind the Conti ransomware. According to the firm, the latter group has allegedly laundered more than $53 million through RenBridge.
Elliptic’s claims come only two days after the U.S. Treasury put the website and smart contracts of the decentralized Ethereum privacy protocol Tornado Cash on its economic sanctions list, effectively banning all U.S. residents from interacting with the protocol. The move marked the first time the Treasury has blacklisted a smart contract or a piece of code representing a neutral technical tool that can be used for both licit and illicit purposes. Like Tornado Cash, RenBridge is based on smart contracts, meaning the U.S. government could potentially sanction it if it decides that it wants to make it harder for the public to access it.
Disclosure: At the time of writing, the author of this article owned ETH and several other cryptocurrencies.
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