Crypto transfers tied to suspected human trafficking networks are set to increase by 85% year-on-year by 2025, according to Chainalysis.
Reports say that the total amount of money has reached hundreds of millions of dollars for all services that investigators have linked to forced labor, prostitution rings, and the sale of child sexual abuse.
The company said most of the activity it tracked was concentrated in Southeast Asia, where smuggling networks are linked to fraud computers and cross-border fraud sites.
Flows were identified through a combination of wallet, transaction tracking, and analysis of services believed to facilitate exploitation.
Stablecoins Control Payment Channels
Based on reports, international surveillance services and prostitution networks operate almost entirely using stablecoins. These tokens were preferred over volatile cryptocurrencies, allowing operators to receive payments without sharp price changes.
Chainalysis said labor placement agents — some accused of kidnapping workers and forcing them into fraudulent activities — also rely on crypto to collect and transfer funds.
Messaging platforms such as Telegram have been identified as a distribution point for certain services, including escort listings and recruitment ads. Crypto wallets linked to these lists have shown repeated payment patterns and connections to extensive illegal pools.
Links to Fraud Computers and Fraud Networks
Reports note that many of the identified funds were closely aligned with online casinos and Chinese money laundering groups.
Scam companies, which have attracted global attention by forcing victims to use online fraud schemes, appear to be linked to payments associated with trafficking.
In a few cases, funds move between services before they are taken to an exchange or converted into other digital assets.
Chainalysis noted that the convergence of networks demonstrated a shared financial infrastructure. Instead of individual operations, the data showed that there are clusters of wallets that overlap and interact with each other under different categories of illegal activity.
Blockchain Transparency as an Investigative Tool
However, Chainalysis asserted that even with the increase in crypto-related trade flows, there were benefits to blockchain research. For example, digital assets are permanently recorded and publicly visible, unlike money.
This record enables compliance and law enforcement to track movement, detect patterns of activity, and detect suspicious activity.
The company advised monitoring large, recurring transfers to labor brokers, active wallet collections across several illegal service types, and repeated stablecoin conversion patterns.
Exchanges are seen as strategic chokepoints, where intervention is possible when funds try to re-enter the mainstream financial system.
Chainalysis’ findings are indicative of the increasing use of crypto-currencies in criminal activities and the growing ability to track them.
Chainalysis says that although digital assets are used in these trafficking networks, visibility into these systems will help disrupt these networks.
Featured image from Pixabay, chart from TradingView
Planning process because bitcoinist focuses on delivering well-researched, accurate, and unbiased content. We maintain strict sourcing standards, and each page is diligently reviewed by our team of senior technical experts and experienced editors. This process ensures the integrity, relevance, and value of our content to our readers.
