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President Trump has started his own cryptocurrency business and vowed to make the United States the world’s “crypto capital.” Crypto companies have declared themselves safe and secure. And a procession of major industries, from Wall Street banks to online retailers, have experimented with digital coins.
But even as the crypto industry gains mainstream acceptance, at least $28 billion tied to illicit activity has flowed into crypto exchanges over the last two years, according to an examination by the International Consortium of Investigative Journalists, The New York Times and 36 other news organizations around the world.
The money came from hackers, thieves and extortionists. It was traced to cybercriminals in North Korea and scammers whose schemes stretched from Minnesota to Myanmar. Over and over, the analysis showed, these groups have moved money onto the world’s largest exchanges, which are online marketplaces where people can convert U.S. dollars or euros into Bitcoin, Ether and other digital coins.
Among the recipients of this “dirty money” was Binance, the world’s biggest crypto exchange, which participated in a $2 billion business deal with Mr. Trump’s crypto firm in May. The money also flowed into at least eight other prominent exchanges, including OKX, a global platform with a growing footprint in the United States, according to the analysis.
“Law enforcement can’t cope with the overwhelming amount of illicit activity in the space,” said Julia Hardy, a co-founder of zeroShadow, a crypto investigations firm. “It can’t go on like this.”
The early days of digital currencies were dominated by thieves and drug dealers, who were attracted by the speed and anonymity of crypto, which make it a useful vehicle for money laundering. Bitcoin, the most popular virtual currency, underpinned dark-web markets where merchants sold narcotics and other outlawed substances, leading to overdose deaths and criminal charges.
