Bitcoin no longer a prime asset for criminals - former crypto advisor Elliptic

Criminals have abandoned the use of Bitcoin for money laundering, with stablecoins emerging as an alternative due to their accessibility.

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Web3 crime is shifting from bitcoin (BTC) to stablecoins, and Ponzi schemes remain prevalent, says Elliptic's former crypto technical advisory manager.

Tara Annison shared the latest insights into the murky world of cryptocurrency crime during a presentation on the last day of EthCC in Paris, addressing a wide variety of ways digital assets facilitate crime or are used to launder money.

According to Annison, Bitcoin is no longer the cryptocurrency of choice for illicit activities or money laundering. As the cryptocurrency industry has matured, the establishment of decentralized finance protocols, mixing services and stablecoins, presents new avenues for criminals to explore.

Annison presentation slide. Source: Tara Annison.

Criminals have turned to using dollar-denominated assets, such as USD Coin (USDC), with their easy accessibility and ability to be laundered through decentralized exchanges (DEXs).

"Criminals are using it as a target. It's also very easy to launder via DEXs. There's significant liquidity, very good volume, so that's quite worrying."

Annison highlighted a potential silver lining from a law enforcement perspective, noting that centralized issuers like Circle could freeze specific USDC tokens before criminals can “exit the asset” in fiat through DEXs or centralized exchanges.

"What we are seeing now is an increase in the number of accounts with USDC and USDT being blacklisted, and these are frozen funds that criminals can no longer access."

Ponzi and pyramid schemes remain a feature of the industry, with Annison...