'Stablecoins' Enabled $40 Billion In Crypto Crime Since 2022 (wired.com) 21
An anonymous reader quotes a report from Wired: Stablecoins, cryptocurrencies pegged to a stable value like the US dollar, were created with the promise of bringing the frictionless, border-crossing fluidity of Bitcoin to a form of digital money with far less volatility. That combination has proved to be wildly popular, rocketing the total value of stablecoin transactions since 2022 past even that of Bitcoin itself. It turns out, however, that as stablecoins have become popular among legitimate users over the past two years, they were even more popular among a different kind of user: those exploiting them for billions of dollars of international sanctions evasion and scams.
As part of itsannual crime report, cryptocurrency-tracing firm Chainalysis today released new numbers on the disproportionate use of stablecoins for both of those massive categories of illicit crypto transactions over the last year. By analyzing blockchains, Chainalysis determined that stablecoins were used in fully 70 percent of crypto scam transactions in 2023, 83 percent of crypto payments to sanctioned countries like Iran and Russia, and 84 percent of crypto payments to specifically sanctioned individuals and companies. Those numbers far outstrip stablecoins' growing overall use -- including for legitimate purposes -- which accounted for 59 percent of all cryptocurrency transaction volume in 2023.
In total, Chainalysis measured $40 billion in illicit stablecoin transactions in 2022 and 2023 combined. The largest single category of that stablecoin-enabled crime was sanctions evasion. In fact, across all cryptocurrencies, sanctions evasion accounted for more than half of the $24.2 billion in criminal transactions Chainalysis observed in 2023, with stablecoins representing the vast majority of those transactions. [...] Chainalysis concedes that the analysis in its report excludes some cryptocurrencies like Monero and Zcash that are designed to be harder or impossible to trace with blockchain analysis. It also says it based its numbers on the type of cryptocurrency sent directly to an illicit actor, which may leave out other currencies used in money laundering processes that repeatedly swap one type of cryptocurrency for another to make tracing more difficult. "Whether it's an individual located in Iran or a bad guy trying to launder money -- either way, there's a benefit to the stability of the US dollar that people are looking to obtain," says Andrew Fierman, Chainalysis' head of sanctions strategy. "If you're in a jurisdiction where you don't have access to the US dollar due to sanctions, stablecoins become an interesting play."
Fierman points to Nobitex, the largest cryptocurrency exchange operating in the sanctioned country of Iran, as well as Garantex, a notorious exchange based in Russia that has been specifically sanctioned for its widespread criminal use. According to Chainalysis, "Stablecoin usage on Nobitex outstrips bitcoin by a 9:1 ratio, and on Garantex by a 5:1 ratio," reports Wired. "That's a stark difference from the roughly 1:1 ratio between stablecoins and bitcoins on a few nonsanctioned mainstream exchanges that Chainalysis checked for comparison."
As part of itsannual crime report, cryptocurrency-tracing firm Chainalysis today released new numbers on the disproportionate use of stablecoins for both of those massive categories of illicit crypto transactions over the last year. By analyzing blockchains, Chainalysis determined that stablecoins were used in fully 70 percent of crypto scam transactions in 2023, 83 percent of crypto payments to sanctioned countries like Iran and Russia, and 84 percent of crypto payments to specifically sanctioned individuals and companies. Those numbers far outstrip stablecoins' growing overall use -- including for legitimate purposes -- which accounted for 59 percent of all cryptocurrency transaction volume in 2023.
In total, Chainalysis measured $40 billion in illicit stablecoin transactions in 2022 and 2023 combined. The largest single category of that stablecoin-enabled crime was sanctions evasion. In fact, across all cryptocurrencies, sanctions evasion accounted for more than half of the $24.2 billion in criminal transactions Chainalysis observed in 2023, with stablecoins representing the vast majority of those transactions. [...] Chainalysis concedes that the analysis in its report excludes some cryptocurrencies like Monero and Zcash that are designed to be harder or impossible to trace with blockchain analysis. It also says it based its numbers on the type of cryptocurrency sent directly to an illicit actor, which may leave out other currencies used in money laundering processes that repeatedly swap one type of cryptocurrency for another to make tracing more difficult. "Whether it's an individual located in Iran or a bad guy trying to launder money -- either way, there's a benefit to the stability of the US dollar that people are looking to obtain," says Andrew Fierman, Chainalysis' head of sanctions strategy. "If you're in a jurisdiction where you don't have access to the US dollar due to sanctions, stablecoins become an interesting play."
Fierman points to Nobitex, the largest cryptocurrency exchange operating in the sanctioned country of Iran, as well as Garantex, a notorious exchange based in Russia that has been specifically sanctioned for its widespread criminal use. According to Chainalysis, "Stablecoin usage on Nobitex outstrips bitcoin by a 9:1 ratio, and on Garantex by a 5:1 ratio," reports Wired. "That's a stark difference from the roughly 1:1 ratio between stablecoins and bitcoins on a few nonsanctioned mainstream exchanges that Chainalysis checked for comparison."
Bogus headline (Score:3)
"Illicit Activity Down as Scamming and Stolen Funds Fall, But Ransomware and Darknet Markets See Growth" is the actual article headline.
Cool (Score:5, Insightful)
Cool, now do cash.
Re: (Score:1)
I used to pay your mom in cash. Now I just scan the QR code tattoo on her back when I'm done and pay her in stablecoin. We are two consenting adults, is it really a crime? Quid pro quo
Re: Cool (Score:2)
Now do less whataboutism.
drop in the bucket compared to cash tho, right? (Score:3)
that being said criminals love US dollars and the shitcoins pegged to them
Well, of course that's what's happening (Score:1)
These types of transactions represent the absolute clearest and best use cases for these coins. There are no better reasons than these. Those who are leveraging the advantages of the technology are doing exactly the right thing. I would expect no less - it would be negligent of them to miss the boat here.
No need to paint it negatively or be dismissive. These are features, not bugs. If it wasn't designed specifically for this kind of thing, I don't know what else people were aiming for.
Re: (Score:2)
Typical. Did you even read the article?
Re: (Score:2)
Yes I did.
Re: (Score:2)
Including the nice chart where it showed that the total percentage of illicit transactions on public blockchains decreased again? Down the .34%?
CrapCoins (Score:4, Insightful)
With any kind of CrapCoins, the only winning move is not to play.
Re: (Score:2)
Unless you are a criminal. Then crapto is a really nice tool to leverage your skills for greater profit!
As Intended (Score:1)
In other news, screwdrivers enable screws to be driven, and hammers enable things to be hammered.
Euphemism? (Score:3)
Stable coin sounds like a polite euphemism for that which a horse leaves behind.
Re:Euphemism? (Score:4, Funny)
I calls them road apples, son.
Fit for purpose (Score:2)
I don't often get to say "Fit for purpose" but... Cryptos facilitating illicit activity makes them "fit for purpose".
How much is left (Score:1)
If you remove tax evasion from the list of crimes?
Re: (Score:3)
Glad you asked! According to the article, only 0.34% of blockchain transactions are illicit. So that leaves a lot left!
RTFA (Score:4, Interesting)
According to the article, only 0.34% of blockchain transactions are illegal. That's down from last year.
Says reserve banking insiders (Score:2)