Cross-chain technology, tools that allow digital assets to move seamlessly between different blockchains, has been one of the most important innovations in crypto’s evolution. That’s because it enables greater interoperability, liquidity, and decentralized application growth.
However, these same bridges and swap protocols have also opened new avenues for illicit activity, highlighting common DeFi exploits and raising questions about how safe crypto is in practice. In 2025, Elliptic, the global leader in digital asset decisioning, estimated that over $21 billion worth of illicit crypto has flowed through cross-chain services, making investors ask, Is cryptocurrency safe when using these technologies?
This marks a sharp increase from previous years and signals that criminals are becoming more sophisticated in exploiting the very infrastructure designed to make crypto more connected and efficient.
Breakdown of the $21B in Losses
The $21 billion in illicit cross-chain transactions recorded in 2025 paints a complex picture of global blockchain crime. A sizable portion, roughly $2.5 billion, or 12%, is linked to North Korean state-sponsored hacking groups such as Lazarus Group, which has continued DeFi exploits.
Further exploits have been carried out on DeFi protocols utilizing bridge vulnerabilities to launder stolen funds, emphasizing why users frequently question whether crypto is secure when navigating complex cross-chain platforms. Another $300 million moved through cross-chain platforms in violation of U.S. sanctions. These services, often tied to Russia, Iran, and North Korea, enable access to privacy coins and facilitate real-world laundering via couriers and cash drops.
The data also reveals just how deeply criminals are leveraging cross-chain pathways to obfuscate their movements. Over a third involved more than three blockchains, while 27% involved more than five. A fifth (20%) spanned more than 10, a tactic designed to fragment transaction trails and evade detection.
This level of operational complexity marks a sharp escalation from previous years, highlighting how blockchain crime is evolving in both scale and sophistication.
What’s Driving the Cross-Chain Crypto Crime Surge?
The recent surge in crypto crime activity can be traced to a mix of technological, market, and social factors working together to boost momentum.
1. Growing Use of DEXs, Cross-Chain Bridges, and Coin Swap Services
Cybercriminals increasingly rely on decentralized exchanges (DEXs), cross-chain bridges, and coin swap platforms to launder funds. These tools allow them to bypass centralized oversight, move assets across blockchains, and obscure transaction trails, making stolen funds harder to trace and recover.
2. State-Sponsored Cybercrime
Nation-state actors, including those linked to North Korea, Iran, and Russia, are using advanced “chain-hopping” and obfuscation tactics to shift illicit funds through multiple assets and blockchains. These operations often finance prohibited weapons programs or evade international sanctions.
3. Industrialized Scam Operations
Large-scale, organized scams, such as the CBEX fraud, are running like professional businesses, complete with marketing campaigns and sophisticated recruitment tactics. These schemes defraud thousands of victims while rapidly cycling crypto crime through mixers and swaps to avoid detection.
4. Memecoin Exit Scams
The rise of speculative memecoins has opened the door to quick “rug pulls.” A recent example, $LIBRA, saw developers abandon the project after raising significant funds, leaving investors with worthless tokens. Proceeds were swiftly moved through anonymous wallets and swapping services.
5. Sanction Evasion by High-Risk Exchanges
Platforms like Garantex, already under international sanctions, continue operating in jurisdictions with weak enforcement. They act as liquidity hubs for illicit funds, making it easier for bad actors to cash out or convert stolen assets into stablecoins or fiat currency.
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Law Enforcement and Regulatory Challenges
Tracking and prosecuting cross-chain crime has become a complex task that often leaves regulators and investigators several steps behind the perpetrators.
Difficulty in Tracing Funds Across Multiple Chains
Cross-chain bridges and decentralized swaps allow users to quickly move crypto assets from one blockchain to another, making it significantly harder to follow the trail of illicit funds.
Unlike single-chain transactions, where blockchain analysis tools can map the flow of tokens, cross-chain transactions often involve multiple platforms, privacy layers, and smart contract interactions.
This fragmentation forces investigators to piece together data from different protocols, many of which do not store uniform transaction metadata, slowing down investigations and reducing the chances of recovery.
Gaps in International Cooperation and Jurisdiction
Because crypto crimes frequently span borders, law enforcement agencies must coordinate with counterparts in multiple countries. However, differences in legal definitions, investigative authority, and enforcement priorities often create roadblocks.
Some jurisdictions lack the regulatory framework or technical capacity to assist in tracing stolen funds, while others may not have formal agreements in place for crypto-specific cooperation. Criminals exploit these jurisdictional gaps, routing funds through countries with weaker oversight to further obscure the trail.
How New Regulations Are Attempting to Address Cross-Chain Risks
Regulators are beginning to address these challenges by introducing rules aimed at greater transparency in cross-chain transactions. Measures include requiring bridge operators and DeFi platforms to implement Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, as well as mandating the reporting of large or suspicious transfers.
Additionally, initiatives like the Financial Action Task Force’s (FATF) “travel rule” for crypto are being adapted to cover multi-chain transactions, forcing greater accountability from service providers. While these changes are still in early stages, they represent a critical step toward reducing the anonymity that enables large-scale cross-chain crime.
Final Thoughts: The Road Ahead for Cross-Chain Security
Cross-chain adoption is unlikely to disappear, but the pace may slow as high-profile hacks continue to make headlines. Investors, developers, and platforms are becoming more cautious, often prioritizing safety over rapid innovation.
Without stronger safeguards, many users may stick to single-chain ecosystems, limiting the full potential of blockchain interoperability. The long-term solution lies in building global security standards, interoperable risk-monitoring systems, and better cooperation between regulators and industry players.
Addressing these vulnerabilities is essential to protect user funds and maintain trust as crypto pushes toward mainstream acceptance. If cross-chain bridges remain a weak link, they risk undermining one of blockchain’s most transformative promises, seamless connectivity.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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