Dogecoin Used by Criminals for Fraudulent Activities
- Dogecoin began as a joke but currently has monetary value.
- The memecoin has a 24-hour trading volume of $726,329,400
Cryptocurrencies have the capacity to change the world but unfortunately, it has the potential to aid bad players and criminals. A recent report released by analytics firm, Elliptic, shows that the popular meme coin, Dogecoin is a familiar currency for scammers and sex traffickers.
Dogecoin has previously enjoyed the support of global figures such as Tesla CEO, Elon Musk, but the coin is said to have been used to fund several scams and illegal activities worth millions of dollars. Created in 2013, Doge excelled as a means of payment and was also used by the Ukrainian government to accept contributions during its ongoing war with Russia.
Writing about Doge’s fraudulent usage, the blockchain analytic firm wrote,
“Dogecoin’s growing popularity means it has not escaped the notice of criminals. In addition to its use as a means of payment for legal goods and services, Elliptic has identified millions of dollars worth of Dogecoin transactions connected to illicit activity. While the vast majority of this activity consists of fraud, scams and ponzi schemes, it also includes the most serious types of crime, including terrorism financing and vendors of child sexual abuse material (CSAM).”
Dogecoin and Terrorism Financing
Terrorism financing was one of the strongest use of the memecoin. The report highlighted the case of a confiscation order issued by Israel’s National Bureau for Counter Terror Financing in 20221 against 84 crypto asset addresses. These addresses were allegedly under Hamas control or otherwise involved in terrorist-related activity. The findings showed that there were several Doge addresses, that had been paid a total of $40,235.
A growing number of traffickers prefer to be paid in Dogecoin, the reports showed. Many believe that the clear reason for this is the anonymity that cryptoassets provide. Elliptic reported that extremist group tend to use cryptocurrencies like Dogecoin when left without access to conventional means of funding. The company lists various far-right news websites, blogs, and video-sharing websites among these.
Dogecoin and Scams
Elliptic claims that robberies, fraud, and Ponzi schemes are the most notorious crimes involving Dogecoin. The company claims to have found over 50 cases of thefts, scams, and Financial crimes that have enabled criminals to earn hundreds of millions of dollars worth of Dogecoin.
Significant instances include the Plus Token Ponzi scheme, which led to the Chinese government seizing more than $20 million in Doge, and an alleged loss of $119 million of Dogecoin associated with a Turkish Ponzi scheme in 2021. Despite all of these, Dogecoin continues to have a place as one of the strongest memecoins.