How crypto investigators uncover scammers’ blockchain billions, scale of money laundering in Asia

Scouring digital currency exchanges for trends, Singapore-based cryptocurrency analyst Patrick Tan began to peer into an underground world of payments and wallets where Asia’s scammers, drug dealers, hackers and other criminals clean their illicit earnings.

“The scale of this problem is far, far greater than what is understood by any government or competent authority at this point in time,” Tan said of Chain Argos’ research.

As Southeast Asia’s online gambling and scam industries have grown larger and more sophisticated, cryptocurrency watchdogs are increasingly investigating the mechanics used to hide criminal proceeds.

The stakes are astonishingly high – and cybercrime experts are only just starting to unspool the true scope of the problem.

Minimal regulation has made digital currencies – in particular the token Tether (USDT) on the Tron operating system – the avenue of choice for moving illicit revenues in high volumes, according to a revelatory UN report on money laundering published in January.

But such transactions can be traced via crypto wallets – despite them using unique, anonymised addresses made of strings of letters and numbers – due to there being a log of recent transactions that sometimes provides investigators with clues about criminals’ identities based on transaction patterns.

While he still believes in the untapped potential of the crypto market, Tan is worried that regulators’ failure to detect and investigate suspicious activity weakens the investment environment.

“The curtains will come down on compliance theatre eventually,” he said.

“When is harder to say, but at least from what we’ve seen, there’s a growing recognition that continuing around this show is not going to fly because there is real harm being