Reported by Aaron Krolik

(Summary shared below. To read full report, go to: https://www.nytimes.com/2025/12/07/technology/how-a-cryptocurrency-helps-criminals-launder-money-and-evade-sanctions.html)

Stablecoins — digital tokens pegged to the U.S. dollar — have rapidly replaced gold, diamonds and art as the laundering vehicle of choice for smugglers, sanctioned actors and global crime syndicates. A New York Times investigation shows how these crypto-dollars can be instantly bought, moved across borders, swapped, mixed, and even funneled back into the traditional banking system with little friction, enabling billions in illicit transactions each year. Chainalysis estimates that criminals used up to $25 billion in stablecoin-linked illicit activity last year, from Russian oligarchs skirting sanctions to ISIS members and major global laundering networks converting drug money to Tether. With a few taps, funds can leap across jurisdictions and into Visa-funded debit cards—sidestepping the compliance rules that make the dollar so powerful as a sanctions tool.

A real-world test of a U.S. crypto ATM in New Jersey shows how easy the system is to exploit: cash in, stablecoins out, then a Telegram bot instantly issues a usable Visa card—with no identity checks. The issuer, WantToPay, marketed these cards to Russians cut off from Western financial systems. Behind it sits a chain of unregulated intermediaries: Hong Kong entities, Russian entrepreneurs in Thailand, card-issuing fintechs in Brazil, and offshore payment processors. Each link performs a narrow function, none fully responsible for compliance, creating an ecosystem where anonymous, crypto-funded payment cards flourish.

Governments are scrambling to keep up. Britain recently dismantled a billion-dollar laundering ring tied to Russia that used a purchased bank in Kyrgyzstan to convert dirty cash into Tether. The U.S. passed the new GENIUS Act, its first major stablecoin regulation, requiring KYC and monitoring for U.S.-based issuers and exchanges. But the law has limits: offshore actors remain untouched, decentralized platforms remain loopholes, and the largest player of all — Tether, with more than $180 billion in circulation — is based in El Salvador and sits outside U.S. jurisdiction. Tether insists it cooperates with law enforcement and notes that most illicit use occurs in secondary markets it cannot control.

The picture grows murkier due to political and financial entanglements. Tether holds over $112 billion in U.S. Treasuries and maintains business ties to Cantor Fitzgerald, whose leadership includes members of Commerce Secretary Howard Lutnick’s family — raising questions about how aggressively regulators can confront an offshore token so deeply intertwined with traditional financial markets. Meanwhile, sanctioned assets can still slip through gaps: after the U.S. blacklisted a ruble-pegged stablecoin, its primary exchange quietly shifted tens of millions in stablecoins to fresh wallets just before sanctions hit.

The result is a fragmented global system where stablecoins empower criminals to move money faster than governments can track it. While regulators tighten rules at home, the offshore crypto universe — from anonymous Telegram bots to unregulated card issuers — continues to offer criminals a high-speed escape route from sanctions, scrutiny, and the traditional financial controls that once made the dollar nearly impossible to evade.