Back to glossaryCyber

Chain-hopping

Financial obfuscation technique consisting of successively converting cryptocurrencies from one blockchain to another to conceal the origin of illicit funds.

Definition

Chain-hopping refers to the rapid and successive conversion of funds between multiple different cryptocurrencies and blockchains with the aim of breaking the traceability of flows and concealing their criminal origin. In the context of cyber ransoms, an attacker who has received a bitcoin payment may chain several conversions: bitcoin to ether via a loosely regulated exchange, ether to monero to benefit from this privacy protocol's opacity, then back to bitcoin to recover liquidity. Ancillary techniques include peel chains (fractional extraction to many addresses to dilute traceability), the use of non-custodial mixers (services blending funds from multiple users), and decentralized exchanges that do not impose identity verification. Blockchain analytics firms such as Chainalysis and Elliptic have developed clustering and probability-tracking algorithms to reconstruct these trajectories, but traceability granularity diminishes with each conversion step. For cyber insurers, chain-hopping complicates OFAC compliance verification before ransom payment, as the identity of the ultimate beneficiary may be obscured behind multiple conversion layers.

Example

In 2021, the DarkSide group received the Colonial Pipeline ransom in bitcoin, then rapidly converted part of the funds via a mixing service and several chain-hopping steps. The FBI nevertheless succeeded in recovering approximately 2.3 million dollars by seizing the private key of an intermediate wallet, demonstrating that chain-hopping is not impervious to high-quality forensic analysis.

Related terms
Related articles
Also known as

saut de chaîne, cross-chain swap, obfuscation de cryptomonnaies