Elliptic Warns of Romance Scams Laundering Billions via Crypto
Blockchain analytics firm Elliptic’s 2025 Typology Report reveals that romance scams have grown into a multi-billion-dollar industry, with criminals laundering victim funds through cryptocurrency. Scammers convince victims to deposit into fake crypto projects, then centralize the funds into self-custody wallets. They obscure origins via complex transaction chains, cross-chain bridges or third-party payment services. On regulated exchanges, mule accounts with repeated IP logins and identical addresses are common. Operators often work in Southeast Asian call centers or warehouses. Unlike cash crimes, blockchain’s transparency gives regulators new tools to detect suspicious patterns. The report also warns that sanctions evasion is rising, as sanctioned actors increasingly use stablecoins for cross-border transfers.
Bearish
This report highlights widespread criminal activity using cryptocurrencies for money laundering, which may trigger stricter regulations and increased compliance enforcement. Negative headlines around romance scams can dent market sentiment and scare off retail traders. In the short term, investors may reduce exposure to high-risk tokens; long term, tougher oversight could raise operational costs for exchanges and DeFi platforms, potentially slowing growth. Similar past revelations, such as major exchange hacks, led to brief sell-offs and regulatory crackdowns.