Dogecoin, the largest meme cryptocurrency, is gaining influence on the dark web, and Dogecoin is increasingly associated with illegal activities such as terrorist financing, Ponzi schemes and child sexual abuse, according to a recent report released by Elliptic, a cryptocurrency detective and blockchain analytics firm.
The London-based blockchain analytics firm has found "millions of dollars" worth of Dogecoin transactions linked to illegal activity, revealing in its report that the meme token promoted by Elon Musk has become a popular choice for bad actors to facilitate millions of transactions.
Elliptic found that cryptocurrencies are widely accepted on some popular dark web marketplaces that offer drugs and stolen data.
While the vast majority of such activity includes fraud, scams and Ponzi schemes, it also includes the most serious types of crime, including terrorist financing and child sexual abuse material providers (CSAM).
Criminals began using Dogecoin shortly after its inception in 2013, and in 2014, there was a cottage version of the Silk Road dark web marketplace called Doge Road. The owners of this now-defunct dark web marketplace ran off with other people's money shortly after its creation.
In 2021, due to the rapid growth of Bitcoin, Bitcoin parodies became more popular with the dark side. A small but growing number of CSAM providers on the dark web and outside now receive bitcoins. elliptics identified only $3,000 in Dogecoin, a small amount.
The bull market has created fertile ground for countless scams and various Ponzi schemes around meme cryptocurrencies. Last August, Turkish prosecutors opened an investigation into a Dogecoin mining scheme that allegedly defrauded investors of up to $119 million.
The report says Dogecoin has been used in a variety of malware campaigns over the past few years. Some dark web marketplaces and malware campaigns also accept Dogecoin. Elliptic found that dark web services such as Just-Kill still accept Dogecoin, while others no longer accept it.
In addition to terrorists, far-right extremist groups appear to prefer cryptocurrencies, including Dogecoin. these groups, far-right blog sites, news and video-sharing platforms use Dogecoin to raise funds when traditional methods are not available.
Far-right extremists such as Infowars have raised more than $1,700 in Dogecoin at the far-right Globalist Struggle news site.
This finding is similar to last year's Financial Action Task Force revelations about the use of cryptocurrencies such as Bitcoin and Privacycoin by far-right groups.
However, Ponzi schemes, theft and fraud appear to be the biggest illegal uses of Dogecoin. Elliptic claims to have identified more than 50 cases of criminals cashing in on millions of dollars of Dogecoin.
Elliptic's report notes that "millions of dollars worth of Dogecoin transactions" have been observed in connection with illegal activities ranging from Ponzi schemes to child sexual abuse material.
Common examples include the theft of $119 million in Dogecoin last year in connection with a Turkish Ponzi scheme, and the seizure of more than $20 million in Dogecoin by the Chinese government in 2020 in the $6 billion PlusToken Ponzi scheme.
In July 2021, Israel's National Counterterrorism Financing Authority issued seizure orders against 84 crypto addresses believed to be linked to the Hamas group, including a wallet containing $40,235 in Dogecoin.
This year, Dogecoin's price has fallen a staggering 91.39 percent from its all-time high, but it remains one of the top 10 cryptocurrencies in the world.
Tesla CEO Elon Musk is the most prominent supporter of Dogecoin, and he recently tweeted that he will continue to support Dogecoin. Dogecoin price has risen 42% in the last three days and is currently recovering from its recent pullback.