tl;dr
Criminals have shifted from using established exchanges for money laundering to creating their own cryptocurrencies, exchanges, and blockchain networks, making tracking more difficult, according to a United Nations Office on Drugs and Crime (UNODC) report. The report highlights the Southeast Asian e...
Criminal enterprises are evolving in the digital age by creating their own cryptocurrencies, exchanges, and blockchain networks to facilitate money laundering and evade law enforcement. A prime example highlighted in a recent United Nations Office on Drugs and Crime (UNODC) report is the Southeast Asian operation Huione Guarantee, which has laundered at least $24 billion by the end of 2024. Despite intensifying regulatory crackdowns, including app removals from major stores and license revocations, Huione continues to thrive, expanding its services to include a stablecoin, a proprietary exchange, and a Visa card for seamless cashout options.
The report also sheds light on the diversification of criminal operations across multiple countries and the adoption of advanced technologies such as AI to orchestrate scams and sophisticated money laundering schemes. Notably, Huione has become a central hub for “pig butchering” scams, which inflicted losses exceeding $37 billion in East and Southeast Asia in 2023 alone, with significant damage also recorded in the U.S.
On another front, underground Bitcoin mining operations, especially in regions like Libya where electricity costs are low, pose challenging enforcement hurdles. Authorities have conducted raids and arrests; however, the decentralized and less regulated nature of mining complicates oversight and control.
In response to these evolving challenges, the European Data Protection Board (EDPB) has issued new guidelines aiming to reconcile blockchain technologies with the stringent requirements of the EU’s General Data Protection Regulation (GDPR). Addressing issues such as data immutability and decentralized governance, the EDPB emphasizes the importance of compliance with data minimization, storage limitation, and rights to erasure and rectification. These guidelines assign clear responsibilities to blockchain system controllers and seek public feedback by June 9 to refine the regulatory framework further.
These developments underscore a global shift where criminals are no longer reliant on traditional exchanges but are building entire blockchain ecosystems to mask illicit activities, compelling regulators worldwide to adapt swiftly to the complexity of decentralized digital finance.