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Digital currencies
This Week in AsiaEconomics

How crypto investigators uncover scammers’ blockchain billions, scale of money laundering in Asia

  • Analysts are investigating the mechanics of how criminals hide their proceeds as Asia’s online gambling and scam industries grow more sophisticated
  • Through blockchain transactions, investigators have uncovered evidence of a global money-laundering process connecting seemingly disparate criminals

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Minimal regulation of digital currencies have made them the scammers’ avenue of choice for moving high volumes of illicit revenue. Photo: Shutterstock
Danielle Keeton-Olsen

Scouring digital currency exchanges for trends, Singapore-based cryptocurrency analyst Patrick Tan began to peer into an underground world of payments and wallets where Asia’s scammers, drug dealers, hackers and other criminals clean their illicit earnings.

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The general counsel at Singapore-based crypto intelligence firm ChainArgos’ initial brief was to help investors looking for smart digital bets to cut through the influencer-led hype around cryptocurrencies.
But as his analysis deepened, he started to investigate cyber fraud cases on behalf of victims from as far apart as the United States and China, segueing into a parallel money system where cash from so-called “pig butchering” scams is washed and moved through multiple digital wallets, often linked to other criminal organisations.
Crypto analysts say they have found a “meta-organisation” of money laundering that helps various fraudsters move their assets through the blockchain. Photo: Shutterstock
Crypto analysts say they have found a “meta-organisation” of money laundering that helps various fraudsters move their assets through the blockchain. Photo: Shutterstock
Tan and other crypto analysts believe they have found a money-laundering “meta-organisation” used by everyone from Myanmar-based fraudsters, to North Korean hackers and alleged financiers of Hamas, who are sanctioned by Israel, to move their illicit assets through the blockchain.

“The scale of this problem is far, far greater than what is understood by any government or competent authority at this point in time,” Tan said of ChainArgos’ research.

As Southeast Asia’s online gambling and scam industries have grown larger and more sophisticated, cryptocurrency watchdogs are increasingly investigating the mechanics used to hide criminal proceeds.

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The stakes are astonishingly high – and cybercrime experts are only just starting to unspool the true scope of the problem.

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