How crypto is used for shady schemes

December 14, 2023
November 17, 2023
< 3 min read

We are all witnessing and receiving news of how another lucky person has earned his millions on cryptocurrency and is now spending his fortune on a luxurious life. Is everything really that smooth? We figured out how to make money on gray schemes.

How are crypto and crime related?

Every year more and more crimes are committed in the crypt. In 2018, Group-IB researchers reported crypto thefts amounting to between $1.1 billion and $1.7 billion. In 2020, Chainalysis reported that about $7.8 billion went into the wallets of crypto criminals, and already in 2021 - as much as $14 billion. The growth of criminal operations is at least 8 times in three years!

In 2021, many cryptocurrencies dropped in value, but this had little effect on crime. According to the TRM Labs report, scammers have not reduced their activity in 2022:

  • $7.8 billion scam through pyramid schemes
  • $1.5 billion worth of darknet trading
  • Thefts using hacker attacks $3.7 billion 

Criminals value cryptocurrencies for their anonymity. To open an account, many platforms don't even require an email. All you have to do is create a 12-word key phrase to use your account, and write down your wallet address somewhere - you're done. You can accept money and no one will know who you are.

The anonymity of crypto is not endless.

The fact is that all translations are in open form - anyone can view them. Using this feature, law enforcement officers identify criminals in one of the following ways:

  • They look through the entire chain of transfers. They look at which wallets have data on the network and monitor transactions until more information becomes available. For example, the police can look through a chain of 10 transfers between crypto wallets, and then go to the exchange through which the initial deposit was made. Platform owners can reveal the holder of the card from which the funds were credited.
  • They track the IP that is fixed on the network. When transferring on some networks, the sender's data, such as IP or MAC address, is recorded. If this information has not been changed on purpose, it allows one to identify the criminal.
  • Find digital traces. During purchases or transfers, criminals leave information about themselves. For example, when they order goods from online stores: this way you can track a cryptocurrency transaction and then find out the address of the offender.

In general, although it is difficult to identify a crypto-criminal, it is still possible. Most small scammers benefit from anonymity because they are harder to track down, but serious criminals are still discovered over time. Let's see what they get up to before they get caught.

Scheme 1. Illegal trade

Through crypto they sell everything that cannot be sold legally: contraband, drugs, personal data, stolen items, sex content. Previously, they used cash and offshore companies for this, but now everything has become much simpler. Crypto became a massive phenomenon in the criminal world in 2020, when everyone was staying at home due to the pandemic. At this time, the turnover of marketplaces on the darknet grew to $1.5 billion.

Just imagine the average prices charged by darknet researchers:

  • Anonymized credit card data costs about $9 per item on the black market, and hacked data for a specific bank account costs about $120.

Fake documents vary in price depending on their complexity: for example, a car insurance card costs only $70. But a passport from the European Union, Canada or the USA costs $1,500.

Other people's cloned credit cards with a PIN code - $20 each. This is when the data of one card is stolen using a special device at an ATM, and then transferred to another and managed with other people’s money.

Scheme 2. Illegal payments

A similar scheme for making money: using cryptocurrencies, payments are made for illegal or partially illegal services. For example, many webcam girls are paid in crypto, they place bets, and order the services of stalkers. Entire new directions in the shadow sphere have emerged - for example, crypto-casinos. It's like usual, only in crypt.

There are also more serious crimes for which payments are made in cryptocurrency. For example, a significant portion of terrorist financing takes place in USDT. Interestingly, they used to do this in Bitcoin, but now they prefer more stable currencies.

TRM Labs researchers recorded that funding for radical groups in USDT increased by 240%, and in Bitcoin - by only 74%

The story doesn't end there - murders are ordered in the crypt. In this case, many people, surprisingly, are saved by scammers. They take hit contracts, take the customer's money and disappear. You won’t be able to go to the police with this - you can’t say “I ordered a murder, but they deceived me.” But sometimes things go further:

For example, in 2022, a Los Angeles resident ordered the murder of a girl, who rejected his advances. He sent $13,000 in Bitcoin to a darknet site to hire a hit man, but police foiled the crime. The guy admitted his guilt, and now he faces 10 years in prison.

Scheme 3. Bribes and corruption

Crypto crimes are not always organized by hackers on the other side of the world. Sometimes it’s more primitive: someone takes a bribe in cryptocurrency to avoid encountering marked banknotes. Here are two stories - Hollywood and banal:

In 2022, the US Department of Justice caught two Chinese intelligence officers. They tried to bribe an American official: they offered him $61,000 in bitcoins to steal documents. This was information regarding an investigation into the Chinese company Huawei.

Scheme 4. Scam and phishing

The field of cryptocurrencies is complex, but interesting: everyone wants to make money on them, but few people understand how it all works. There are many scammers in this field. They recruit naive adventurers and then squeeze money out of them.

A popular method of deception is scam through pyramids. In the first half of 2023 alone, they caused $50 million in damage. It works like this: an entrepreneur invites everyone around to invest in the project, promising untold riches. It sends payments to the first investors so that they are happy and drag their friends. When enough money has been deposited into the pyramid company’s account, the scammer disappears from the radar. As a result, the scammer ends up with several new millions, and investors are left with nothing.

Money is stolen using phishing

Fraudsters create a fake website or service to steal users' confidential data. For example, a scammer creates a fake crypto wallet interface. When a person enters the password for his account, it falls into the hands of a criminal. Most likely, in a couple of minutes he will withdraw all the money from his wallet.

But there is a more cunning fraud scheme: the deceiver disguises himself as a crypto investor and writes about currency trading. At one point, they begin to stir up interest in the coin and claim that you can make good money on the transaction. For example, he writes fake news about the merger of large companies or the launch of a new technology project.

When the audience is already hoping for a big score, the scammer publishes “instructions” for buying a currency that should rise sharply. But in reality, no currency exists - he created the token himself a couple of weeks ago. The criminal exchanges the assets of subscribers for a coin that he himself launched. And after a while he disappears with their money.

Scheme 5. Money laundering and export

In cryptocurrency, some criminals launder their ill-gotten money and take it out of the country, while others help them in this. There is even a separate direction for such services - “crypto-mixers”.

The crypto mixer works like this: it receives money from accounts that, in theory, can be tracked. For example, payments from users who do not hide their data. From the crypto-mixer, they are redistributed to several anonymous accounts, combined in one wallet, then passed in small transactions through several more people until the trail becomes confused. After this, the money goes to the customer’s wallet, and the owner of the “crypto-mixer” takes a commission for the operation.

Once the trace of a currency is encrypted using a crypto-mixer, its origin is much more difficult to trace. Criminals use anonymous currency for future crimes, or, conversely, legalize money with a dark past using exchanges.

Can a legal business operate with cryptocurrency?

Cryptocrime is only one side of the world of crypto, but there is another, cryptocurrencies are a promising means of payment, because with it you can not be afraid of borders, payment restrictions and other barriers that interfere with the transfer of money.

It is convenient to accept payments in crypto if you are running an international business: sometimes transferring money from one currency to another is much more difficult than paying with USDT or Bitcoin.

With crypto, you can hire employees all over the world without any problems. If you receive income in USD or EUR, but you need specialists from other countries who do not have the ability to accept such currencies, you can pay in crypto. Or, on the contrary, you receive income in Brazilian real, Thai Baht, Turkish Lira and other local currencies, but you need specialists from Europe and the USA - pay in crypto.

For such translation Swaps developed safe and simple functionality Receive

You issue an invoice in euros, dollars or another currency, send a link to payment - you have the money. In Bitcoin, USDT or another cryptocurrency from dozens offered

A few clicks and the payment is received.

In some countries, cryptocurrencies have not yet been fully regulated, but in Europe and the USA the process is more active. To ensure that currency exchange occurs legally, states issue laws and regulate the operation of exchanges and payment services. In this case, the cryptocurrency cannot be used for illegal business, and the user will be protected from scammers.

How it works using the example of SWAPS: in order to obtain EU certificates and legally work with almost all countries of the world, the company made the service meet security requirements. First of all, Swaps is a fully regulated European company with financial and crypto licenses in Estonia and Canada. Further, this is full compliance with all rules and security requirements for user onboarding and payments. Implementation of know your client (KYC) principles - user verification using a passport, driver’s license or other document. A win-win situation: the state has everything under control, users can be calmer, businesses can pay legally.

After verification you can use it completely legally service — including issuing invoices, paying taxes and concluding transactions. Swaps products are available for businesses; they can be embedded on a website using an API: then, directly in the cart of an online store or when ordering services, customers can pay in cryptocurrency, buy or sell crypto.

The verification procedure in Swaps is simple, will not take much time and will provide security guarantees for all parties.


There are many crimes being committed in the world: it doesn’t matter whether it’s in crypto, USD, EUR, or even for free. Money has nothing to do with it at all - you shouldn’t condemn technology just because someone uses it for selfish purposes.

Crypto opens up the opportunity to transfer unlimited payments and not worry about payment restrictions, high commissions and transfer time. A business can hire Worldwide specialists and accept payments from anyone, it sounds cool and it actually is. 

Thank you and use crypto correctly!


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