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

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.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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Author

Akriti is a Zurich-based reporter, focused on the political, regulatory, and legislative developments around crypto. She is a business journalist with over six years of experience working as a correspondent for organizations like Channel NewsAsia and Bloomberg TV India. In that time, Akriti has covered news in the finance, pharma, and state sectors.