Shocking Cross-Chain Swaps: $21.8 Billion in Illicit Funds Exposed

The world of cryptocurrency is often lauded for its transparency and innovation, but a recent report from blockchain analytics firm Elliptic casts a stark shadow on its darker corners. Brace yourselves: a staggering $21.8 billion in illicit or high-risk crypto has flowed through cross-chain swaps, marking a dramatic 200% increase in just two years. This isn’t just a minor blip; it’s a profound shift in how criminals exploit the decentralized ecosystem, making the fight against crypto crime more challenging than ever.

The Alarming Surge of Illicit Funds in Crypto

Elliptic’s findings reveal a concerning trend: the amount of illicit digital assets moved via cross-chain methods has skyrocketed from $7 billion to $21.8 billion. This isn’t just about large-scale hacks; it reflects a broader adoption of these techniques by various criminal elements. North Korea, for instance, is attributed with a significant 12% of these movements, underscoring the state-sponsored nature of some operations.

Gone are the days when criminals solely relied on simple mixers or dumping tokens on a single exchange. The modern illicit actor leverages the expanding multi-chain ecosystem, moving funds across numerous blockchains to frustrate investigators and evade detection. As Arda Akartuna, Elliptic’s APAC lead crypto threat researcher, explains, the sheer number of available assets and obfuscation channels has widened significantly with the growth of new blockchains.

How Cross-Chain Swaps Became a Criminal Highway

What exactly are cross-chain swaps, and why have they become so central to criminal operations? These tools, including blockchain bridges, decentralized exchanges (DEXs), and coin swappers, enable the seamless movement of assets between different blockchain networks. While legitimate users appreciate their utility for liquidity and interoperability, criminals have repurposed them into sophisticated money laundering mechanisms.

The core appeal lies in obfuscation. By hopping between chains, criminals aim to break the on-chain trail, making it incredibly difficult for law enforcement and analytics firms to follow the money. This strategic complexity is designed to waste investigative resources and bypass automated tracing systems.

Blockchain Bridges: The New Laundering Superhighways

Blockchain bridges, designed to connect disparate networks, have inadvertently become prime conduits for illicit flows. Elliptic’s 2025 cross-chain crime report highlights two primary techniques employed by criminals:

• Structured Chain-Hopping: Funds are split and simultaneously distributed across several blockchains.
• Multi-Hop Chain-Hopping: Assets are moved repeatedly from one chain to another in sequence.

These methods are intentionally inefficient and often incur higher fees, a small price criminals are willing to pay for the added anonymity. Consider a chilling early 2025 case: hackers linked to North Korea stole $75 million from an exchange. They then meticulously bridged the funds from Bitcoin to Ethereum, then to Arbitrum, Base, and finally Tron, employing both structured and multi-hop tactics. This sophisticated approach demonstrates the lengths criminals go to hide their tracks.

It’s not just state actors. A UK fraud case involving $200,000 saw the culprit split funds across 90 different assets on multiple chains to fund online gambling. This shows how mainstream this tactic has become, extending even to smaller-scale criminals.

DEXs and Coin Swappers: Entry Points for Crypto Crime

While often seen as transparent, Decentralized Exchanges (DEXs) are increasingly serving as initial entry points in the money laundering cycle. They are particularly useful for swapping low-liquidity tokens for more widely accepted assets like USDT or Ether (ETH) without the need for centralized platforms that enforce Know Your Customer (KYC) rules.

A notable example is the May 2025 exploit on Cetus, a major liquidity provider on the Sui blockchain, where attackers drained over $200 million. The perpetrator used a DEX to swap USDT to USDC, likely to leverage lower bridging costs, before bridging to Ethereum and converting USDC to ETH via a DEX aggregator. The choice of ETH is strategic, as it lacks the inherent freeze functionality that centralized stablecoins like USDT and USDC possess.

Criminals also exploit the open design of DEX aggregators and Automated Market Makers (AMMs) to route transactions through multiple obscure trading pairs or in small batches, often via smart contracts, to avoid triggering Anti-Money Laundering (AML) alarms. Newer DEX services are even blurring the lines by offering native cross-asset swaps, further complicating tracing efforts.

The Role of Coin Swap Services

Beyond bridges and DEXs, coin swap services operate as clandestine currency changers. These platforms facilitate anonymous asset exchanges across different blockchains with minimal friction, no registration, and often no meaningful AML checks. They have become a go-to for darknet markets, ransomware networks, and online carding fraud.

Unlike DEXs, these are centralized intermediaries that deliberately operate in opaque or permissive jurisdictions. Many openly advertise on darknet forums and Telegram, promising to accept ‘dirty BTC’ or emphasizing their non-cooperation with law enforcement. Some even offer bizarre services like armed cash pickups or ‘treasure’ cash drops, where physical currency is buried in pre-agreed locations in exchange for crypto.

To summarize the primary tools exploited for crypto crime through cross-chain movements:

The interconnectedness of these illicit activities is striking. Elliptic reports that roughly 25% of illicit flows through coin swap services are linked to unlicensed online gambling platforms. These platforms, often tied to Russian-speaking and Southeast Asian operators, are also connected to scams like pig butchering and narcotics trafficking, creating a self-sustaining loop of high-risk funds.

Unmasking Money Laundering: The Fightback Against Crypto Crime

The evolution of chain-hopping from a fringe tactic to a routine strategy presents a formidable challenge. Laundering methods are now complex sequences spanning multiple chains, tokens, and platforms, often structured to deliberately waste analysts’ time or break automated tracing. The $75 million North Korea case, where funds moved through five blockchains rapidly, is a prime example of this complexity becoming the strategy itself.

However, the infrastructure for fighting crypto crime is adapting. Visibility remains key, and a growing suite of tools is emerging to combat these sophisticated methods:

• Blockchain Analytics Platforms: Tools like Elliptic Investigator, Chainalysis Storyline, and TRM Forensics are specifically built to automate and visualize cross-chain analysis. They transform what was once a manual, hours-long process into something achievable in minutes.
• Centralized Stablecoin Issuers: Companies behind stablecoins like USDT and USDC retain the ability to freeze flagged assets, providing a crucial choke point for illicit funds once identified.

As Akartuna points out, “It doesn’t matter if they’ve tried to do it over five different blockchains or just once — we’re able to follow those funds automatically through our investigation tools.” This automation is critical in the ongoing cat-and-mouse game between criminals and law enforcement. While the challenge is immense, the tools and expertise to combat these illicit flows are continuously evolving, offering a glimmer of hope in an increasingly complex digital underworld.

Conclusion: A Call for Vigilance in the Digital Frontier

The Elliptic report serves as a critical wake-up call. The dramatic surge in illicit funds moved through cross-chain swaps highlights the urgent need for enhanced vigilance, advanced analytical tools, and greater collaboration across the crypto ecosystem. While the decentralized nature of crypto offers immense benefits, it also presents novel avenues for criminal exploitation. As the multi-chain landscape continues to expand, so too must our collective efforts to secure it, ensuring that innovation does not inadvertently become a haven for illicit activities. The battle against money laundering in the digital age is far from over, but with evolving tools and increased awareness, we can strive for a safer, more transparent crypto future.