Behind the explosion of "All or Nothing": Southeast Asia's 100 billion cryptocurrency black and gray production

Recently, the anti-fraud promotional film "All or Nothing" has become popular. In the play, foreign fraud gangs use beautiful women to lure victims into participating in the cryptocurrency slaughter, and defraud the victims of their money. Accompanied by the concentrated exposure of black and gray products in Southeast Asia outside the film , which aroused the resonance of countless audiences.

Art comes from life. As a new type of value carrier and transmission tool, cryptocurrency has been widely adopted by criminal groups in Southeast Asia. Cryptocurrency is used in activities including online gambling, fraud, and money laundering. At the same time, its anonymity, decentralization, and borderless characteristics also make related illegal activities more concealed, and the circulation of stolen money is faster, causing troubles for law enforcement agencies.

Fortunately, the blockchain ledger data is open and transparent. Based on a wide range of address tags and open source network intelligence, Bitrace's encryption analysts will be able to track funds in illegal encryption activities through on-chain analysis. This article aims to illustrate through data:

• Tether* (hereinafter referred to as USDT)* is widely used in illegal activities and gambling activities in Southeast Asia. Among the addresses that Bitrace has included in monitoring, the scale in 2022 will exceed 115 billion USDT;
• The return of USDT transmits risks to more addresses and platforms, making it passively become a transaction related party of illegal platforms. In 2022, more than 14.6 billion USDT will flow into trading platform accounts; *USDT flowed out from the addresses of illegal platforms in Southeast Asia, and the top trading platforms passively assumed the main share, but operators and gamblers of gray and black platforms in Southeast Asia, mainly Chinese, have a preference for a few exchanges.

Figure | "Desperate"

Example of Encrypted Currency Killer

The telecommunications fraud industry is the most well-known type of illegal industry in Southeast Asia. As fraud gangs expand their business in the new technology field, cryptocurrency scams* (romantic scam)* have occurred frequently in recent years. This type of scam is often combined with investment fraud. Fraud gangs look for fraud targets on the Internet, develop a romantic relationship with the victim by creating attractive characters, and choose opportunities to induce them to participate in cryptocurrency investment. After the victim invests a large amount of money , Often either a "loss" occurs, or "taxes and fees" are required to be paid, or the principal cannot be recovered directly.

Take a pig killing scam that occurred in Xiaoshan, Hangzhou in 2021 as an example. The victim was induced to participate in cryptocurrency investment on a platform called "Asia Pacific Exchange". After the victim purchased USDT on other trading platforms and transferred to this platform, the fraudster manipulated the background data to increase the victim's "profit" rapidly. At present, cash withdrawal will not be granted if the payment of taxes and fees is required. In order to obtain income, the victim in this case blindly borrowed money and mortgaged the real estate, and invested a total of 12 million yuan worth of USDT, and finally lost all his money.

In fact, the person who develops an online romantic relationship with the victim is fictitious, the investment platform is fake, and the so-called "taxes and fees" are even more nonsense. In the subsequent fund analysis, we observed that more than one victim encountered this scam, and the recharged funds quickly flowed into a certain water house address in Laos after simple collection.

There are countless cases where stolen money flows into money laundering waterhouses in Southeast Asia through encrypted currencies like this kind of telecom fraud.

In 2022, the scale of illegal activities in Southeast Asia will exceed 115 billion USDT

Based on a large number of high-risk address data on the chain and automatic retrospective analysis technology, Bitrace continuously monitors the inflow and outflow of funds from some major black and gray platform addresses in Southeast Asia, and promptly identifies those related to online gambling, fraud, money laundering, coin theft, extortion, and terrorism. Cryptocurrency funds related to illegal activities such as

According to Bitrace’s DeTrust risk data platform, In 2022, a total of more than 115 billion USDT will flow into some Southeast Asian related platform addresses, mainly including 37.16 billion online gambling funds and 69.78 billion money laundering funds, fraud-related* (some of which have been included and the stolen money has not been collected) Cleaned fraud incidents) *USDT 460 million.

It is not difficult to see from the monthly data that the capital scale for the whole year of 2022 is in a relatively stable state, which shows that this kind of currency-related activities have not been affected by the fluctuations in the cryptocurrency market, and to a certain extent, it has achieved "crossing the bull-bear market". ". It may imply that the participants or victims are not real cryptocurrency investors.

In 2022, 14.6 billion contaminated USDT will return from Southeast Asia

Earlier, Bitrace disclosed that gambling-related incidents in the TRON network used USDT as the medium to pollute the top centralized trading platform data. With the continuous increase of illegal entity address labels and the tracking and analysis of related address funds, we are adding more On the premise of multiple network and trading platform addresses, more comprehensive pollution data using USDT as the medium has been obtained.

According to the DeTrust risk data platform under Bitrace, in 2022, a total of more than 14.64 billion contaminated USDT will flow directly or indirectly into centralized trading platforms** from known addresses associated with Southeast Asian entities. These include 7.71 billion USDT of online gambling funds, 4.86 billion USDT of money laundering funds, 1.88 billion USDT of other illegal activities funds, and a small amount of 190 million USDT of fraudulent funds.

Figure｜Scatter diagram of risk capital data received by each trading platform (horizontal axis)

The contamination of cryptocurrency trading platforms by venture capital also follows the Matthew effect. Among them, Exchange A, which has the largest volume, received more contaminated USDT from Southeast Asia, including 38.87% of online gambling funds, 60.02% of money laundering funds, 43.94% of other illegal activities funds, and 70.59% of fraudulent funds. funds.

In addition to the volume factor, some USDTs that are contaminated by certain categories also show a preference for different trading platforms. Taking a firm B whose business volume is 12% of firm A and serving a large number of Chinese users as an example, in terms of other illegal activities funds and online gambling funds, the business address of firm B collected 33.24% and 38.39% respectively, which is almost the same as that of firm A A is equivalent. This may be because most Southeast Asian dark industry platform operators, gamblers, casino agents, and Sifang payment platform operators that provide cryptocurrency fund settlement for casinos are all Chinese, resulting in a disproportionate inflow of related funds relative to the business volume.

Write at the end

Our industry is facing serious anti-money laundering challenges. The well-known currency mixing platform TornadoCash was sanctioned by the U.S. Department of the Treasury for being accused of assisting certain hackers in money laundering. Earlier, several centralized or non-centralized encryption institutions were prosecuted by the government for indirectly providing services to hackers. For other encryption entities In other words, perhaps there is only one future of compliant operation.