DeFi Exchanges Become The Largest Source Of Fraud, Illicit Proceeds Totaling $4 Billion

Cryptocurrencies have long been subject to controversy due to its anonymity. Since most transactions are untraceable, they can attract plenty of bad actors who will try to launder their money by taking advantage of this feature.

Elliptic, a firm that manages risk for various DeFi platforms released a report where they calculated the total illegal proceeds that various DeFi platforms had processed. According to their findings, close to $4 billion have gone through cryptocurrencies that had possibly malicious intent.

Cryptocurrencies have come a long way from being the boogeyman of the financial world, as many now respect it as a worthy financial investment. However, this report goes to show that it still has a problem with bad actors abusing the service.

Money Stolen From Defi Exchanges Reaching A Staggering $1.2 Billion

Along with individuals using DeFi exchanges to launder their money, plenty has also been targets of cybercrime. Unfortunately, Cyber heists are very common in the DeFi space, with many exchanges losing millions in the process.

The most recent example of a DeFi exchange losing millions to a heist was Transit Swap, which lost a total of almost $30 million. While Transit Swap was lucky enough to get $19 million almost immediately, with hopes of recovering the remains of the amount in a matter of days, not all exchanges are so lucky.

Laundered Funds Made Up $1.8 Billion of the Total $4 Billion

Other than DeFi exchanges becoming targets of cybercriminals, the report also found that bad actors were also using the cross-chains. Cross chains are major highways connecting various blockchains, ensuring that transfer speeds are as fast as possible. In fact, these cross-chains are an integral part of the crypto framework, ensuring that transfer speeds remain fast.

However, that doesn’t save it from being abused. According to the most recent reports, many bad actors have been able to launder $1.8 billion in funds. The biggest online crime syndicate to take advantage of these cross-chains has been the Lazarus Group, a collective of cybercriminals in North Korea.

Other Major Ways That Crypto Crime Is Increasing

Elliptic’s report goes greatly in depth about the sheer volume of hacks that have occurred throughout the year on the crypto platform. In one particular case, Elliptic noticed that a group managed to get away with $540 million.

They stole this amount from a cross-chain bridge that connects Ethereum to the Ren Protocol, called the RenBridge. The bad actors were syphoning off small chunks of money with each transaction. It allowed the group to get away from stealing from multiple transactions while flying under the radar. All in all, cryptocurrencies have become one of the most important ways that criminals are able to launder their money.