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HomeDeFiElliptic report unveils over $4 billion crypto laundered via DEXs exchange

Elliptic report unveils over $4 billion crypto laundered via DEXs exchange

Elliptic, a blockchain security firm, revealed in its report that since 2020, around $4 billion had been cleaned up via cross-chain bridges, decentralised exchanges (DEXs) and coin swaps.

As per the report, DEX’s unlawful use generally comes in the form of coin swapping. This could involve swapping tokens for ETH, swapping tokens to avoid asset freezes, or swapping tokens to connect them to another network.

Elliptic

Elliptic said that these exchanges were used to launder almost $3.3 billion. In one-third of these instances, a token was swapped for another token via DEX.

The firm further expresses that the fourth quarter of 2021 witnessed the most activity, when swapping of $374.3 million took place.

The report also unveiled that more than 75% of illegal crypto swaps were carried out by 1inch, Curve.fi, and Uniswap, whereas 14% of such swapping activity were carried out by Paraswap and CoW Protocol.

Prior to Tornado Cash’s sanctions, the report indicated that it was fairly usual to swap tokens for mixing. Many people used DEXs to swap their stolen assets into ETH because the mixer’s ETH contract had the most volume.

The report also clarifies that the usage of DEX by criminals does not entirely reflect the purposes of these transactions. The majority of use cases are still for legal purposes notwithstanding the growth.

“While the $1.2 billion in stolen funds processed by DEXs is a considerable sum, it is equal to the current daily average trading volume of Uniswap alone. The primary purposes of DEXs are overwhelmingly legal and serve a significant role in the current, increasing crypto ecosystem. DEXs are hence here to stay.”

The report noticed the necessity of controlling the dangers of criminal exploitation, particularly in light of sanctions. It just takes one transaction from the sanctioned party to put DEX into a potential breach.

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