Illicit Crypto Activity: How Bad Actors Abuse Blockchain and How to Spot It

When you hear illicit crypto activity, the use of cryptocurrency for illegal purposes like money laundering, ransomware, or sanctions evasion. Also known as crypto crime, it’s not about the technology itself—it’s about how people misuse it. Bitcoin and Ethereum aren’t inherently shady. But because they’re global, fast, and often anonymous, bad actors see them as tools to hide money. The FBI, Europol, and Chainalysis all track these flows. And they’re getting better at it.

One of the biggest drivers of crypto money laundering, the process of cleaning illegally obtained crypto through complex transactions to hide its origin is mixing services and privacy coins. But even those aren’t foolproof. In 2023, the U.S. Treasury sanctioned a mixing platform that handled over $1 billion in stolen funds. Meanwhile, darknet markets, online black markets that use crypto to sell drugs, weapons, and stolen data like Hydra and AlphaBay have been shut down—yet new ones pop up weekly. They all rely on the same weak spots: unregulated exchanges, peer-to-peer trades, and users who don’t know how to spot a scam.

And it’s not just criminals. Some governments use crypto to bypass sanctions. Russia’s use of Bitcoin for cross-border trade, as covered in our posts, isn’t illegal everywhere—but it’s a clear case of crypto sanctions evasion, using digital assets to move value around financial restrictions imposed by other countries. These aren’t theoretical risks. Real people lose money to fake airdrops, rigged exchanges like InfinityCoin, and phishing scams disguised as DeFi tools. The same platforms that promise privacy often leave trails—wallet addresses, transaction patterns, and exchange deposits that forensic tools can trace back.

What you’ll find below aren’t conspiracy theories. These are real cases: failed exchanges with zero volume, tokens with no team, airdrops that vanished overnight, and bridges that got hacked because someone trusted the wrong code. Some posts show how criminals operate. Others show how investigators stop them. And a few? They’re warnings—about tokens like PRIVIX or IMG that look like investments but behave like gambling machines built on deception. You don’t need to be a coder to spot the red flags. Just know this: if something sounds too good to be true, or if no one knows who built it, it’s probably part of the problem—not the solution.