Over $4B laundered through DEXs, coin swaps and cross-chain bridges, Elliptic reports
Blockchain security company Elliptic clearly Since 2020, about $4 billion has been laundered through decentralized exchanges, cross-chain bridges and coin swaps.
According to reports, illegal use of DEX usually takes the form of coin swaps. This could be an exchange of tokens to avoid freezing assets, an exchange to ETH, or an exchange to bridge tokens to another network.
Elliptic says about $3.3 billion has been laundered through these exchanges. One-third of such cases used DEX to exchange one token for another. The company added that the fourth quarter of 2021 was the most active, with $374.3 million swapped.
According to the report, 1inch, Curve.fi and Uniswap account for over 75% of all illegal crypto swaps, while Paraswap and CoW Protocol account for around 14% of such activity.
Meanwhile, the report points out that before Tornado Cash was sanctioned, exchanging tokens for blending was very common. As his ETH contract on Mixer had the highest volume, many people used his DEX to exchange stolen assets for his ETH.
However, the report reveals that criminals’ use of DEXs is not a complete representation of the intended use of these exchanges. Even with growth, most use cases are still for legitimate purposes.
“The amount of stolen funds processed by the DEX is worth $1.2 billion, which is equivalent to the current average daily trading volume of Uniswap alone. It is legal and serves an important purpose in today’s increasingly connected crypto ecosystem, so DEX is here to stay.”
However, the report notes the need to manage the risk of criminal exploitation, especially in the face of sanctions. Only transactions from authorized entities can compromise a DEX.
