On Wednesday, blockchain analytics firm Elliptic said that the cross-chain channel RenBridge was used to transfer $540 million in illicit funds, since 2020. These funds were said to be money that was collected as ransomware by hackers. The report also noted that about $153 million of this fund was stolen by North Korean hackers. Although RenBridge had facilitated the transfer of a huge amount of funds, only $540 million was considered to be illicit funds.
Cross-chains bridges are used to exchange information or cryptocurrencies as well as non fungible tokens (NFTs) between different blockchain networks. They are considered to be a bit of a blessing as they make it easy to transact between networks as well as a bit of a curse as they can be used by cyber criminals to launder illicit gains.
According to reports RenBridge has been used to launder illicit gains in the following thefts:
In August 2021, North Korean hackers $33.8 million from Japanese crypto exchange Liquid and used the channel to transfer the funds.
Conti and Ryuk cyber groups under the Russian Wizard Spider organization stole $145 million and used RenBridge to launder the illicit gains.
Cross-chain bridges facilitate transactions and transfers but also make it difficult to know the identities of the transaction, the nature of the transaction and the destination of funds. This makes it easy for criminal or illicit gains to go through the channel.
Elliptic’s co-founder Tom Robinson has said that the launch of their Holistic Screening solution for cross-chain compliance has set new standards for compliance. He also said that individuals crypto assets and blockchain were no longer systems that remained in isolation. They had become a part of the crypto economy, which is interconnected.
Elliptic’s Holistic Screening can track illicit activities that take place on cross-chains. This will help compliance teams as well as regulators to deal with the hacks that are made by cyber criminals, who prey on the weaknesses that are inherent within the blockchain.