1inch Becomes Popular Among Criminals for Money Laundering
A recent report from blockchain forensic firm Elliptic reveals that 1inch, a decentralized exchange (DEX) aggregator, has become the preferred platform for laundering illicit funds. Criminals are taking advantage of decentralized finance (defi) applications, and over $322 million of illicit funds have passed through 1inch’s contracts since 2019.
Elliptic attributes the influx of funds to 1inch’s design as an aggregator that optimizes cross-asset swaps by interacting with other DEXs’ liquidity pools. The recent updates to 1inch also enable cybercriminals to hide their tracks more effectively by using limit orders to instantly swap their illicit funds at scale.
However, 1inch is not the only DEX exploited by bad actors. Elliptic points out that terrorist organizations like the Palestinian Islamic Jihad use TRON-based protocols such as SunSwap to source funds in TRX.
Crypto Analytics Firm Disputes Overstated Metrics on Terrorist Use of Crypto
In contrast, U.S.-based blockchain analytics firm Chainalysis argues that there are exaggerated metrics and flawed analyses regarding the use of cryptocurrency among terrorist groups. While some organizations like Hamas, Hezbollah, and Palestinian Islamic Jihad do utilize crypto for financial activities, it remains a small part of their overall funding strategy.
Hot Take: Defi Platforms Must Strengthen Security Measures
The growing use of defi platforms for money laundering highlights the urgent need for stronger security measures in the cryptocurrency industry. As criminals continue to exploit these platforms, it is crucial for DEX aggregators like 1inch to enhance their protocols and implement stricter measures to prevent illicit activities.
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