A $540m Crypto Scam Using RenBridge Has Come To Light

08/12/2022

2 minutes read

2022.08.12 09:06

RenBridge, a decentralized application that offers cross-chain services, has been used for a $540m crypto scam. Recent media reports, backed by the research released by London-based Elliptic, revealed that the crypto criminals have been laundering money since 2020.

Having pioneered the use of blockchain analysis for financial crime compliance, Elliptic noted that decentralized cross-chain bridges are an unregulated alternative to exchanges for transferring value between blockchains.

“One such bridge – RenBridge – has facilitated the laundering of at least $540 million in proceeds of crime,” stated Eliiptic. “RenBridge has become particularly popular with those seeking to launder the proceeds of theft.”

Breakdown Of Laundered Amount – $540m

Furthermore, giving a breakdown of the amount laundered, Elliptic pointed out that $33.8m was stolen from Japanese crypto exchange Liquid in August 2021 and in total, $97m from Liquid, in an attack that has been linked to North Korea.

“Just days ago, $156m was stolen from the Nomad bridge, following the discovery of a bug that was exploited by numerous individuals. Hours later, some of the thieves were sending the stolen funds through RenBridge. So far, $2.4m in cryptoassets stolen from Nomad have been sent through RenBridge,” said Elliptic’s report.

Another illicit group- Conti Ransomware – attacked the Costa Rican government and triggered a national state of emergency. The cybercrime group laundered over $53m through RenBridge.

“Meanwhile, Ryuk has perpetrated ransomware attacks against hundreds of hospitals and schools over the past four years and has laundered over $92m to date, with transfers still ongoing, Elliptic’s research said.

Cybercriminals Are Using Decentralized Cross-chain Bridges

Despite being heavily regulated, movement of the proceeds of crime between blockchains – sometimes referred to as “chain-hopping” – is used as a means to evade tracing, usually achieved by exchanging assets through cryptoasset exchanges that can be used anonymously.

“Blockchain bridges such as RenBridge pose a challenge to regulators, since there is no central service provider that facilitates these cross-chain transactions,” Elliptic said, pointing out that “the transparency of decentralized systems can still be leveraged to trace transactions through cross-chain bridges.”

On the Flipside

David Carlisle, Elliptic’s vice president of policy and regulatory affairs, called cross-chain bridges “a bit of a blessing and a curse at the moment,” in a media statement.

Why You Should Care

Elliptic has indicated RenBridge was “an important facilitator” for Russia-linked ransomware gangs.