July 25, 2023
By Anjali Kochhar
In a recent presentation at the EthCC conference in Paris, Tara Annison, the former head of technical crypto advisory at Elliptic, revealed new insights into the world of cryptocurrency-related crime. According to Annison, criminals are no longer relying on Bitcoin for money laundering and illicit activities. Instead, they are turning to stablecoins as an alternative due to their accessibility and ease of use.
Bitcoin, which was once synonymous with illicit activities, has lost its appeal to criminals as the cryptocurrency industry has matured. The emergence of decentralized finance protocols, mixing services, and stablecoins has opened up new avenues for nefarious actors to explore.
The cryptocurrency of choice for criminals now seems to be dollar-denominated stablecoins, such as USD Coin (USDC), valued at $1.00. Criminals are drawn to stablecoins because they can be easily laundered through decentralised exchanges (DEXs). Annison highlighted the worrisome fact that these DEXs offer deep liquidity and high trading volume, making them attractive targets for illicit activities.
However, there might be a silver lining from a law enforcement perspective. Annison pointed out that centralized issuers like Circle could freeze specific USDC tokens before criminals can convert them into fiat currency through DEXs or centralized exchanges. As a result, an increasing number of accounts with USDC and Tether (USDT) are being blacklisted, effectively blocking the criminals’ access to those funds.
Ponzi and pyramid schemes continue to plague the sector, with criminals having stolen a staggering $7.8 billion from unsuspecting victims through these scams. While the sector has experienced a 46% decrease in scams compared to previous years, criminals are finding more sophisticated ways to launder funds. Chain swapping and asset swapping are prevalent techniques used to hide illicit activities, resulting in losses of around $4.1 billion.
Despite these challenges, the ongoing bear market has made the sector less appealing for cybercriminals. The lower cryptocurrency prices and reduced hype have contributed to the decline in scam activities.
Annison also raised concerns about the increasing use of cryptocurrencies like TRON (TRX) and Tether (USDT) to evade sanctions and finance terrorist activities.
Additionally, the advent of metaverse experiences has attracted nefarious actors, leading to emerging crimes in virtual worlds. These include phishing attacks, non-fungible token theft, wallet tainting, and augmented reality hacks.
Annison’s presentation served as a stark reminder of the reality of criminal activity in the cryptocurrency sector. It highlights the urgent need for increased security measures to protect users and combat illicit activities effectively. As the cryptocurrency landscape continues to evolve, authorities and industry players must remain vigilant to stay one step ahead of these ever-evolving cyber threats.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
