What Possibilities Does Crypto Trading Open Up for Criminals?

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Cryptocurrency trading is not regulated. Anything that is not regulated is subject to sinister activities, including criminal ones. While it is true that there is more good to humanity than evil, the risk is still there, and this risk is what many authorities are trying to control and avoid. Today, let us look at the various ways people can use cryptocurrency to engage in illegal activities.

Scams from Criminal Influencers

There are influencers like Jay Mazzini who would face prison time because of a cryptocurrency scam. Jay is an Instagram influencer who preached the value of bitcoin.

The issue in Jay’s case is that he stole more than $2.5 million from his followers through bitcoin. The allegation was that he defrauded his followers. How did he do this?

He encouraged his followers to send him bitcoin to his bitcoin wallet. In return, he would send the cash to the bitcoin sender via wire transfer. Jay offered a good deal that people could not refuse. He offered fiat money, in US dollars, that was higher than the actual trading value of bitcoin.

When asked why he would not buy the bitcoin from a trading platform, he said that they would not allow him to use the trading platforms. He explained that the trading platforms were worried that his buying activities would affect the bitcoin economy because he was offering a big amount of money.

Many of his followers sent him bitcoin to his wallet. Then, he sent screenshots of wire transfers from his bank account to the follower’s bank account in cash. Here is the problem: the screenshots were fake. He never sent any money. His Instagram account is now deleted, and he is now facing 20 years in prison for the wire fraud charge.

Pump and Dump Schemes

Many celebrities tout altcoins, the name used for all cryptocurrency alternatives to bitcoin. From Elon Musk to Kim Kardashian, there is no shortage of endorsements for these coins.

An interesting case of a pump and dump scheme is one that involved some members of the FaZe Clan, a group of gamers.  They launched a program called Save the Kids, a cryptocurrency token.

The purpose was good, as the intention was to donate money to Binance Charity Wallet. The thing was that several members used this as an opportunity to pump and dump. They owned many of the cryptocurrency tokens, and when the prices went up, they immediately sold their holdings.

In a pump and dump scheme, people will rally buyers to buy the cryptocurrency. The prices would go up, and then the dumpers would sell their holdings, thus causing a drop in the market price. The victims are those that bought at a high price, as they can never recover their investment.

Funding Terrorist Cells

Terrorist factions like Al Qaeda encourage their supporters to make donations through cryptocurrencies, believing that it is anonymous.

What they do is tell their followers to send money to different crypto accounts. While the crypto world has been investing in the decryption of transactions, many types of cryptocurrencies are able to avoid decryption and, thus, detection.

The funds would eventually go to the militant’s accounts. After this, the terrorist will order things like guns and bomb-making materials from other individuals. These individuals also use cryptocurrencies.

From here on, the final recipient of the cryptocurrencies will convert them into cash. They can sell their cryptocurrencies on open markets and then transfer the funds into their bank accounts.

Since the process cannot be detected, the end recipients of the cryptocurrency could launder the money and make it seem clean. They could also use fake names for their wallets or change the address of their crypto accounts.

Because of this, authorities have a difficult time pinpointing where the money came from and who received it. Islamic terrorist groups in Southeast Asia engage in this kind of scheme, and no one has been arrested or prosecuted.

Countries like the Philippines allow cryptocurrency to be used as legal tender. People could easily convert crypto assets to fiat.


While cryptocurrency is a great way to expedite transactions and democratize money, there are sinister people out there who would use it to commit a crime. Many businesses now accept crypto, including legit live casino businesses online.

People should protect themselves from people who do these schemes, and the only way we can do that is by arming ourselves with knowledge. People must be cautious and critical of any new altcoin or any new scheme that promises a significant return on investment.

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