Wrapped Tokens

• Criminals use wrapped tokens (e.g., WBTC on Ethereum) to bridge assets between blockchains, enabling them to leverage mixers on chains that do not directly support the original cryptocurrency.
• This multi-layer approach obscures the trail across different protocols and networks, making it more challenging for investigators to trace the end-to-end path of the funds.

• Criminals wrap assets (e.g., BTC to WBTC) to access Ethereum-based or multi-chain DeFi mixers, leveraging cross-chain interoperability to break direct ties to the original blockchain.
• After mixing, they can unwrap the tokens, effectively disconnecting the final destination addresses from the initial deposit addresses, hindering transactional forensics across multiple networks.

• Bridging services often lock the original cryptocurrency on one chain and issue a wrapped token on another, effectively hiding the source of funds.
• Criminals exploit this process by minting and moving wrapped tokens repeatedly, breaking the direct on-chain link to the locked collateral.
• Each wrap-and-unwrap cycle complicates mapping the illicit funds back to their origin, as investigators must trace changes across multiple blockchains.

• Criminals exploit wrapped tokens, which are pegged to underlying assets on separate blockchains, to facilitate burn-and-mint obfuscation.
• After burning the original tokens on one chain, they mint wrapped equivalents on another chain, effectively creating a fresh transaction record.
• This approach fragments the audit trail across multiple networks, impeding chain analytics and complicating investigators' attempts to link the newly minted tokens back to the original source.

• Cross-chain bridges frequently operate on a lock-and-mint model, where original tokens are locked on one blockchain and minted as wrapped tokens on another.
• This lock-and-mint mechanism breaks the direct transactional link between the source and destination of funds, impeding traditional blockchain tracing.
• Criminals exploit wrapped tokens to achieve greater interoperability and obscure provenance, as wrapped assets often appear fungible and decoupled from the locked originals.

• Cross-chain bridging often utilizes wrapped tokens to transport value between incompatible blockchains, circumventing single-chain analytics tools.
• Criminals convert illicit funds into wrapped tokens, then transfer them across chains, complicating the original transaction trail.
• Each wrap and unwrap step creates additional layers, making it harder for authorities to pinpoint the true source or ultimate beneficiary of the funds.

• By wrapping assets, criminals move ransom proceeds across otherwise incompatible blockchains.
• These cross-chain transfers increase transaction layers, severing clear links to the initial ransom wallet and complicating any single-ledger investigation.

• Criminals deliberately wrap and unwrap tokens to shift value across blockchains that do not natively support the original asset.
• Each conversion interrupts transaction history, scattering records among multiple ledgers and making tracing more complex.
• Rapid cross-chain bridging using wrapped tokens complicates detection and enables criminals to bypass potential monitoring or freezes on a single network.

By converting locked assets on one blockchain into wrapped tokens (e.g., WBTC, wETH) on another, criminals effectively break on-chain links to the original funds. Repeated wrapping and unwrapping across multiple chains fragments transactional data, thwarting investigators' efforts to trace illicit proceeds and facilitating advanced layering.

• Criminals wrap assets (e.g., converting ETH to WETH) to utilize DeFi services on different chains, making it harder to correlate the original source of funds.
• Moving wrapped tokens across bridges and liquidity pools breaks the typical trace, scattering the transaction history over multiple blockchains.
• This cross-chain activity fragments data, complicating AML efforts to identify and follow illicit proceeds.

• Wrapping mechanisms allow criminals to shift funds from one blockchain to another (e.g., Bitcoin to Ethereum as WBTC), obscuring the original chain source.
• Offenders can swiftly unwrap and re-wrap tokens on multiple networks, generating numerous short-lived addresses and transactions that hamper investigative tracing.
• This cross-chain approach increases the complexity of transaction chaining, especially when used alongside privacy-enhancing or off-chain tools.

• Criminals use token-wrapping services to shift funds between blockchains in P2P environments.
• By converting crypto into wrapped tokens, they sever simple on-chain transaction trails and distribute proceeds through multiple wallet addresses.
• This cross-chain layering tactic complicates efforts to follow illicit funds, especially when using unregulated P2P exchangers.

• Criminals convert stolen funds into wrapped tokens on other blockchains, effectively concealing the original source of the assets.
• By bridging to different chains, they split the on-chain transaction record, complicating investigators' attempts to track final destinations.

• Criminals wrap cryptojacked coins when bridging across multiple blockchains (e.g., wrapping ETH to WETH) to leverage different ecosystems.
• Each cross-chain conversion dilutes the transaction history, making it tougher to link the wrapped tokens back to the original illicitly mined crypto.