A multi-layered investigation tracing stolen assets across multiple blockchains and uncovering laundering patterns.
What is Cross Chain?
Cross Chain refers to the movement of cryptocurrency assets across different blockchain networks to obfuscate their origins, often as part of money laundering or illicit activity. This process leverages cross-chain bridges, decentralized exchanges (DEXs), or swap protocols to transfer funds between blockchains, creating investigative blind spots for tools limited to single-chain analysis.
Why do we use it?
Key Aspects of Cross-Chain Activity in Investigations:
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Mechanisms:
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Cross-chain bridges lock assets on one blockchain and mint equivalent tokens on another (e.g., Ethereum to Binance Smart Chain).
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Chain hopping involves rapidly moving funds across multiple chains to evade detection.
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Cross-asset swaps convert one cryptocurrency to another (e.g., Bitcoin to Tether) to break transaction trails.
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Challenges for Investigators:
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Loss of visibility: Traditional tools often fail to track funds once they leave their native blockchain.
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Manual tracing delays: Piecing together transactions across chains without automated tools can take weeks, allowing criminals to cash out.
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Obfuscation tactics: Mixers, peel chains, and webflow patterns further complicate tracing.
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Impact on Illicit Activity:
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Over $7 billion in illicit crypto was laundered via cross-chain methods by 2024.
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20% of complex cross-chain cases involve more than 10 blockchains, with 33% spanning four or more chains.
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Investigative Solutions:
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Cross-chain analytics tools (e.g., Merkle Science’s Tracker, Elliptic’s Holistic Screening, Chainalysis Reactor) unify transaction tracing across chains, automating fund flow mapping.
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Behavioral Signatures: Machine learning identifies patterns like cross-chain swaps or peel chains to flag suspicious activity.
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Example Workflow:
A criminal moves ransomware proceeds from Ethereum to Binance Smart Chain via a bridge, swaps to Monero on a DEX, and attempts to cash out. Without cross-chain tools, investigators lose the trail after the initial bridge transfer. Advanced tools automatically detect the swap and bridge usage, enabling law enforcement to freeze funds before cash-out.
