Elliptic, a blockchain analytics company, has released a report that points out criminals’ increasing use of Dogecoin as a payment for illegal activities. Dogecoin has been linked to illicit activity, including Ponzi schemes and the financing of terrorism (CSAM), according a new report from Elliptic.
According to the report, the me coin is growing in popularity as a payment method. However, other than legitimate reasons, it has been identified by bad actors with “millions of dollars of Dogecoin transactions linked to illicit activity.”
Elliptic stated that while the majority of the activity is fraud, scams, and ponzi schemes (ponzi schemes), it also includes the most serious crimes, such as terrorism financing, and vendors of child sexual abuse material, (CSAM).
The report pointed out the “increasing acceptance” of Dogecoin for terrorist financing. It cited a July 2021 seizure or order by Israel’s National Bureau for Counter Terror Financing to stop 84 crypto addresses thought to be linked to Hamas militant group or used in terror-related activities.
A “small and growing” number of CSAM sellers operating on both the darknet (and clearnet) were also identified in the report. They have also received Dogecoin payments. Elliptic did not identify the exact amount of Dogecoin in this case. It was less than $3,000, but analysts warned that it indicates a “flare for criminal actors to adopt many cryptoassets in an effort to avoid detection.”
Ponzi schemes and scams
According to Elliptic thefts, scams, and Ponzi schemes are the “most noteworthy” crimes relating to Dogecoin.
According to the firm it has found more than 50 cases of fraud, theft, and Ponzi schemes that helped criminals make Dogecoin worth “hundreds upon millions”
These include the $6 Billion PlusToken Ponzi Scheme which saw more than $20 MILLION of DOGE confiscated by Chinese authorities in 2020 and the alleged theft in 2021 of $119 Million worth of Dogecoin in connection to a Turkish Ponzi Scheme.
Far-right extremists embrace crypto
Extremist groups of far-right extremists, when they are unable to raise funds through traditional methods, have turned to cryptocurrency including Dogecoin and Elliptic.
These include blogs, video sharing sites and news sites that are far-right, according to the firm.
Infowars is a news website that claims to be “fighting globalism” and “promoting a human future worldwide.” It has raised more than $1700 in Dogecoin (PS1,383).
Elliptic’s findings are similar to those of the Financial Action Task Force last year reporting that far right groups are increasingly turning towards cryptocurrencies such as Bitcoin or privacy currencies.
Dogecoin is currently the 10th most popular cryptocurrency in the world with a market capitalization of over $8 billion. This has been promoted heavily by Tesla CEO Elon Musk.