Decentral Block Post

Crime in Web3 is shifting away from Bitcoin (BTC) to stablecoins while ponzi schemes remain prevalent, according to Elliptic’s former head of technical crypto advisory.

Tara Annison shared the latest insights from the murky world of cryptocurrency-related crime during a presentation on the final day of EthCC in Paris, addressing a wide variety of ways in which digitals assets are either facilitating crime or being used to launder funds.

According to Annison, Bitcoin is no longer the cryptocurrency of choice to carry out illicit activities or launder money. As the cryptocurrency industry has matured, the establishment of decentralized finance (DeFi) protocols, mixing services and stablecoins present new avenues for criminals to explore.

Criminals have shifted towards using dollar-denominated assets, like USD Coin (USDC), as their easy accessibility and ability to be laundered through decentralized exchanges (DEXs).

“The criminals use that as a target point. It's also super easy to launder through Dex's. There's deep liquidity, really good volume, so that's pretty worrying.”

The Vermont Department of Financial Regulation (DFR), a United States state agency, warned citizens against rising crypto investment frauds perpetrated over popular social media sites.

On June 25, 74-year-old Naum Lantsman lost his life savings — $340,000 — to a crypto scam orchestrated over Instagram and Telegram. The DFR referenced the incident as it stressed “the need for Vermonters to exercise extreme caution and vigilance when using or investing in cryptocurrency.”

Instagram has been rated as the top platform connected to crypto fraud by the Federal Trade Commission (FTC), which also holds true for Lantsman. His initial contact with the crypto scammer happened over Instagram, wherein he came across a post from SpireBit claiming to be an "international financial broker" dealing in cryptocurrencies.

Without any form of investigation or research about the platform, Lantsman created an account on SpireBit. A Spirebit representative contacted Lantsman over Telegram and — over several days — coerced him into making investments.

What started off as a $500 investment ultimately resulted in a loss of more than $340,000. Once a user ‘invests’ on fake platforms like SpireBit, the dashboard shows profits on every trade, which encourages investors to shell out more of their savings.

The market capitalization of stablecoins has hit the lowest level since August 2021 coming on the back of 16 consecutive months of decline, a new report says.

Cryptocurrency analytics platform CCData released a report on July 20 saying the stablecoin market cap fell 0.82% from the start of the month until July 17, taking the sector's market cap to $127 billion.

Stablecoin market dominance took a slight fall and is currently at 10.3%, dropping from 10.5% in June.

Of the top ten stablecoins, Pax Dollar (USDP) was hit hardest, falling 43.1% to $563 million in July — its lowest figure since December 2020.

CCData believes the fall was largely attributed to MakerDAO — a decentralized autonomous organization behind the Maker protocol — which elected to remove $500 million of USDP from its reserves because it failed to accrue additional revenue.