The black market industry is increasingly using cryptocurrencies for its operations to achieve its financial objectives quicker and more smoothly.
According to a report published by the United Nations Office on Drugs and Crime, cryptocurrencies are now increasingly being used for illicit activities in poorly regulated areas in East and Southeast Asian countries.
The report states that cryptocurrencies are combined with the latest technologies as organized crime groups pose new and significant challenges for the authorities.
Mekong region key in illegal cryptocurrency trading
According to data published in the UN report, the Mekong region has had the highest number of cases in recent times.
The Mekong region plays a vital role as criminals use it as a roadmap to develop a similar industry focusing on casinos. Operators in this area offer travel and accommodation, as well as various financial services like uncontrolled currency exchange. This makes the Mekong region a hub for criminals aiming to develop businesses focusing on casinos.
Illegally operated or unregulated casinos and cyber scams have seen an alarming rise in the Mekong region. According to the UN, these new models feature very sophisticated technology for the market. The UN report quotes:
“Recent advances in chatbots using advanced language models, deepfake technology, and automation processes have led to the emergence of more sophisticated and harmful cyber fraud schemes, posing a significant threat to both individuals and the formal banking industry.”
Another technique employed by lawbreakers is to establish locations for illegal gambling operations and scams in mainly unregulated areas that are beyond the control of autonomous armed groups. It is essential to add that a whole industry of travel agencies specializing in travel to casinos has also developed. These trips not only provide travel and accommodation:
“Travel agents have played a role equivalent to that of international banks, offering a wide range of clandestine financial services. These include credit insurance, foreign exchange, and payment and settlement solutions in various currencies. They have also been involved in remittance operations and debt collection mechanisms outside the legal framework, exploited by organized crime activity.”
Stablecoins are the preferred option for this type of activity due to their advantages over other digital currencies.
Tether is the most widely used stablecoin for illegal trading due to its ease of use.
Tether is the predominant one involved in this type of activity by illegal groups due to its advantages over its competitors. The report highlighted that the use of Tether on the Tron blockchain is the most well-known in the unregulated market in the region due to its ease of use, anonymity, low costs, and stability.
For this reason, several countries have opted to take action to curb its impact on the market and their economies.
People who are part of local cryptocurrency exchanges in the region can also play an important role in money laundering through massive gaps in crime accusations on the blockchain, reports created by exchanges, and their predominance in money laundering activities that seek to inflate the volumes of cryptocurrency transactions to reduce the illicit transactions that can be identified.
The report also indicates possible improvement actions to combat financial illegality in the region and implement transparent policies.
A nonprofit group accused Circle of using its USD Coin stablecoin on the Tron network to facilitate illicit financing. A Reuters investigation also found evidence that Tron had been employed for the same purpose in the Middle East. For its part, China took action against using USDT in the foreign exchange market last month. Tether, the most famous stablecoin on the market, is willing to cooperate with the authorities in everything they require.
