The recent warning from the Financial Action Task Force (FATF) regarding the increase in stablecoin-related crimes has led industry experts to argue that such measures are necessary for safer transactions involving stablecoins.
Stablecoins as the Basis for Crypto Crime
According to Chainalysis, stablecoins account for 63% of all illicit transaction volumes in cryptocurrency. Expert Jordan Wain noted that the rise in illegal activity is linked to their popularity for both legitimate and unlawful operations. Furthermore, he mentioned that FATF calls for stricter licensing and monitoring of stablecoin issuers.
Transparency and Monitoring of Stablecoins
Asset Reality's Aidan Larkin emphasized the importance of implementing control and monitoring mechanisms to prevent the use of stablecoins for criminal purposes. He pointed out that a purely technological approach is insufficient and called for increased international cooperation in tracking fund flows. Among his proposals is applying anti-money laundering standards to the digital realm.
Concerns About Circle and DPRK
Following FATF's call for closer scrutiny of stablecoins linked to North Korea, researchers like ZachXBT have noted the use of USDC from Circle. He pointed out significant transaction volumes connecting them to North Korean workers' activities. Circle also froze $57 million in USDC at the request of a U.S. court. The company did not respond to inquiries for comments on this matter.
As stablecoins continue to gain traction, the need for proper regulation and monitoring of their usage becomes critically important in preventing criminal activities in the cryptocurrency space.
