Dogecoin Gains Popularity for Illegal Activities, Says Elliptic Report

The popular cryptocurrency Dogecoin (DOGE) is increasingly linked to several illicit activities such as financing terrorism, Ponzi schemes and child sexual abuse, according to a new report from Elliptic.

The blockchain analytics firm revealed in its report that the meme coin popularized by Elon Musk has become a popular choice for bad actors to facilitate transactions in the millions.

Although the vast majority of this activity consists of frauds, scams and Ponzi schemes, it also includes the most serious types of crimes, including financing terrorism and sellers of child sexual exploitation material. (CSAM).

In July 2021, Israel’s National Counterterrorism Financing Bureau issued a seizure order against 84 crypto addresses suspected of being associated with the Hamas group. One of these wallets contained $40,235 in Dogecoin.

Additionally, the analytics firm also discovered that a small but growing number of CSAM providers on the darknet and outside are now receiving Bitcoin. Elliptics only identified $3000 in Dogecoin, which is a small amount.

But he warned that it could represent a “growing appetite for criminal actors to adopt a wide range of crypto assets to avoid being noticed.”

Darknets accepting Dogecoin

Several darknet markets and malware campaigns also accept Dogecoin. Elliptic has identified darknet services such as Just-Kill that still accept Dogecoin while others no longer accept it.

Besides terrorists, far-right groups also seem to have taken a liking to cryptocurrencies, including Dogecoin. These groups, far-right blogging sites, news and video-sharing platforms, use Dogecoin to raise funds when they cannot use traditional methods.

Infowars is one such website. The far-right news site that fights globalism has raised over $1,700 in Dogecoin.

This discovery is similar to revelations by the Financial Action Task Force last year about far-right groups using cryptocurrencies such as Bitcoin and privacy coins.

However, Ponzi schemes, theft and fraud seem to be the biggest illicit use of Dogecoin. Elliptic claims to have identified more than 50 cases where criminals cashed in millions of dollars in Dogecoin.

Popular examples include the alleged theft of $119 million in Dogecoin associated with a Turkish Ponzi scheme last year. In 2020, the Chinese government also seized over $20 million DOGE in the $6 billion PlusToken Ponzi scheme.

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