Cryptocurrency fraud remains a booming industry for scammers who exploit the hype, anonymity, and global influence of digital currencies.
But as cryptocurrency theft and fraud soared 53% last year to reach billions, law enforcement agencies need to explore an area of historical uncertainty: where criminal sophistication often outweighs regulatory efforts. It focuses on many areas.
According to one report, the number of global crypto-related convictions has increased by a “staggering 267%” over the past five years. The latest Federal Bureau of Investigation (FBI) sting that resulted in the arrest of more than a dozen criminals provides a rare look into the sophisticated schemes law enforcement agencies use to combat fraudsters as they expand and industrialize their operations. do.
To catch the 18 criminals indicted last week (October 9), the FBI created its own crypto asset called NexfundAI and tracked its usage to prove fraud and manipulation. Rather than flipping a coin for a profit, criminals found themselves on the other end of a sealed indictment.
Be careful when talking about buyers.
“Operation Token Mirrors targeted nefarious token developers, promoters, and market makers in the cryptocurrency space. What we uncovered is that the executives of four crypto companies and “This has led to charges against four virtual currency 'market makers' and their employees who are accused of spearheading a sophisticated trading scheme that allegedly defrauded investors of millions of dollars.” – Jody Cohen he said in a special article. An official with the Federal Bureau of Investigation's Boston Division said in a press release. “The FBI has taken the unprecedented step of creating its own virtual currency token and company to identify, disrupt, and bring these fraud suspects to justice.”
The operation is a rare victory in an ecosystem rife with deception, and while the FBI's actions may not dismantle the entire crypto criminal network, it does, no matter how decentralized the plan is. also serves as a clear message that scammers are not untouchable.
read more: Cryptocurrency fraud intensifies as digital asset market rises
Strike back into the virtual currency wilderness
The FBI's actions come against a backdrop of the broader cryptocurrency industry and its institutional investors seeking greater utility and visibility across the financial services ecosystem.
Just last week, Stripe allowed merchants in the US to accept Circle-issued USDC through their online checkout page starting Wednesday (October 9th). Stripe announced in April that it would reinstate cryptocurrency payments after suspending them in 2018.
PYMNTS Intelligence found in June 2022 that 77% of merchants who accept cryptocurrency payments said they do so because of lower transaction processing fees compared to other payment methods. Additionally, 32% of merchants who are expanding their use of cryptocurrencies believe that cryptocurrencies will help them acquire new customers, according to a joint study by PYMNTS Intelligence and BitPay, “Paying With Cryptocurrency: What Consumers and Merchants Expect From Cryptocurrency.” They say they are doing this because they believe in it. digital currency. ”
And at the heart of this new cryptocurrency payments space are not the various cryptocurrencies that have existed in this space for over a decade without impacting merchant acceptance, but instead observers and industry Stakeholders are similarly excited about stablecoins that: USDC as mentioned above.
For example, PayPal completed its first business payment to EY earlier this month using its stablecoin PYUSD, while Visa is using its stablecoin and tokenized deposits to issue fiat-backed tokens. Launched a new platform for banks. Meanwhile, Coinbase is also expanding the ways businesses can pay through its Coinbase Prime intermediary platform.
Also read: What CFOs need to know about expanding the use of stablecoins
Bridging the gap between traditional finance and digital assets
“It’s important to know that cryptocurrencies are not just Bitcoin, Doge, and NFTs,” Sheraz Shea, head of payments at Solana Foundation, told PYMNTS in May. “Blockchain is truly an alternative rail for payments and financial assets.”
“Blockchain solutions and stablecoins – I don’t want to use the word crypto because this is more about fintech – are proving to be a product-market fit in cross-border payments. ,” Scheer said in a separate conversation.
For example, Singapore, one of the most digitally engaged countries in the world, is working to establish itself as a hub for digital assets, with stablecoin growth in the second quarter, according to a PYMNTS Intelligence study. The payout reached nearly $1 billion, the highest amount in the world. It shows the potential that digital tokens have for commerce.
The report notes that traditional international payment methods, such as wire transfers, can be slow, expensive and subject to high regulatory hurdles. However, stablecoins offer a more efficient alternative with near-instantaneous transactions, lower fees, and fewer intermediaries.
Of course, as with all things cryptocurrency, it's important to be wary of scammers.
