Criminals have laundered at least $4 billion worth of illegal crypto proceeds using decentralized exchanges, bridges that allow asset transfers across different blockchains, and coin swap services, a new study shows.
Roughly $1.2 billion of digital assets have been laundered through decentralized exchanges, or peer-to-peer marketplaces without middlemen, a report from crypto compliance company Elliptic said Tuesday.
Another $1.2 billion in illicit crypto proceeds have been laundered using “coin swap” services, which allow users to exchange their coins often anonymously, according to the report.
Furthermore, cross-chain bridge RenBridge has been used to launder more than $540 million in illicit crypto, the report wrote.
Though such services usually have legitimate use cases, allowing traders and investors to move funds within and across blockchains more efficiently, they have been increasingly adopted by criminals, analysts at Elliptic noted.
The lack of anti-money laundering measures on such platforms meant that “criminals face little resistance when using them for malicious purposes,” the Elliptic analysts wrote.
In August, the U.S. 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 creation in 2019, the agency said.