Former Elliptic Crypto Adviser Asserts Bitcoin Loses Favor as Choice Asset for Criminals

In the ever-evolving landscape of cryptocurrency-related crime, new trends are emerging, and established patterns are changing. Tara Annison, the former head of technical crypto advisory at Elliptic, recently shed light on these developments during her presentation at EthCC in Paris. Addressing the audience, she delved into various ways digital assets are facilitating criminal activities or being utilized for money laundering.

Gone are the days when Bitcoin was the prime choice for illicit activities and money laundering. As the cryptocurrency industry matures, criminals are exploring alternative avenues, capitalizing on the rise of decentralized finance protocols, mixing services, and stablecoins. Annison pointed out that criminals are now turning towards dollar-denominated assets like USD Coin due to their easy accessibility and the ability to launder funds through decentralized exchanges (DEXs).

She expressed concern about the popularity of such assets among criminals, stating, “The criminals use that as a target point. It’s also super easy to launder through DEXs. There’s deep liquidity, really good volume, so that’s pretty worrying.”

On a positive note, Annison highlighted a potential silver lining from a law enforcement perspective. Centralized issuers like Circle can now freeze specific USDC tokens before criminals can convert them into fiat through DEXs or centralized exchanges. This move has led to an increased number of blacklisted accounts holding USDC and USDT, effectively freezing the funds that criminals can no longer access.

Ponzi and pyramid schemes continue to plague the sector, with Annison revealing that an alarming $7.8 billion was stolen from unsuspecting victims through these scams. Moreover, criminals are adopting more sophisticated techniques to launder their ill-gotten gains. Chain swapping and asset swapping have become prevalent methods to obscure illicit activity, amounting to about $4.1 billion.

Annison elaborated on how criminals hop across different platforms using DEXs, coin swap services, mixers, and bridges to throw blockchain analytics firms off their trail.

Interestingly, the ongoing bear market has impacted the frequency of scams in the sector. As the sector loses some of its appeal for cybercriminals due to lower prices and diminished hype, scams have decreased by 46% compared to previous years. Annison advised remaining cautious during bear markets, as this decline in criminal activity might offer some respite to the crypto community.

The use of cryptocurrencies to evade sanctions and finance terrorist activities has also risen. TRON and Tether have gained popularity among nefarious actors for their illicit activities.

Even the rapidly growing metaverse experiences are not immune to criminal activity. Virtual worlds are witnessing various crimes, including phishing attacks, nonfungible token theft, wallet tainting, and augmented reality hacks.

Annison’s eye-opening presentation underscores the pressing need for increased security measures to protect users and combat illicit activities in the crypto space. As the landscape evolves, so too must the strategies to safeguard the integrity of the digital asset ecosystem.

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