UN officials expressed concern over illegal use of cryptocurrencies in East and Southeast Asia.
The United Nations Office on Drugs and Crime (UNODC) published a report on organized crime in East and Southeast Asia. The report highlighted the growing use of cryptocurrencies by criminal groups, fraudsters, and the underground economy.
The report identified the following uses of crypto in criminal activities:
- “pig butchering” scams;
- unlicensed casino operations;
- money laundering.
UN analysts noted that the use of cryptocurrencies combined with large language model-based chatbots, deepfake technology, and modern automation capabilities contribute to cyber fraud development. New scams are becoming more sophisticated and disruptive, posing a severe threat to individuals and the banking industry.
Moreover, an illicit gambling industry is emerging in the region. Participants organize illegal casinos in poorly regulated special economic zones or territories beyond the control of the central government. Operators offer junket tours, providing clients with a variety of financial services. They function as international bank-like entities. This is made possible through the use of cryptocurrencies.
According to UN analysts, the USDT stablecoin on the Tron blockchain is the most popular digital asset among Southeast Asia’s shadow economy due to its stability, ease of use, high level of confidentiality, and low fees. Local crypto exchanges engage in money laundering by using fabricated reporting and wash trading to cover up illegal transactions.
PwC research shows that by the end of 2023, about 60% of countries worldwide will have regulated stablecoin markets. In particular, 25 out of 43 countries analyzed passed legislative stablecoin regulation.
