How to deal with the problem of black and gray industry technology abuse in cryptocurrency Author: Andy Greenberg, compiled by Wired magazine: Saoirse, Foresight News Cryptocurrencies have long been claimed to allow people to pay any fee to anyone around the world due to their low threshold, cross-border, and low regulatory trading characteristics. Nowadays, this' any cost 'has unprecedentedly begun to include people - victims of trafficking are forced into fraud zones or involved in large-scale transactions, openly bought and sold in cryptocurrency trading, while perpetrators often go unpunished. According to the latest research released by Chainalysis, a cryptocurrency tracking company, there will be an explosive growth in human trafficking transactions supported by cryptocurrencies by 2025. This type of crime mainly includes laborers trapped in various parks in Southeast Asia, forced to engage in online fraud, and sex trafficking and prostitution gangs. Researchers have found that encrypted transactions used for human trafficking have increased by at least 85% year-on-year after tracking the cryptocurrencies used by criminal gangs through blockchain technology. Chainalysis states that the total amount of such transactions now reaches at least hundreds of millions of dollars annually. But the company refuses to provide precise numbers because its calculations are still conservative estimates and the actual scale is likely to be higher. Chainalysis analyst Tom McLouth said, "This is a continuation of industrial exploitation. Borderless, low transaction fee payment methods allow human trafficking to scale up faster." The study found that these human trafficking activities are mainly operated by Chinese speaking criminal groups, who advertise on the instant messaging app Telegram. A large number of posts have appeared on Telegram's "Guarantee" black market channel, such as "New Coin Guarantee" and the recently shut down "Potato Guarantee". These channels provide cryptocurrency custody services to prevent both parties from being deceived, while also becoming massive money laundering centers. Analysts have successfully traced the relevant transactions through these advertisements, law enforcement information, and partner agency data. These transactions are almost entirely conducted using stablecoins - cryptocurrencies pegged to the US dollar to avoid price fluctuations, such as USDT and USDC. The large profits from human trafficking ultimately flow back into these Telegram guarantee markets, forming a money laundering network worth billions of dollars. In Myanmar, Cambodia, and Laos, fraud zones that lure South Asian and African workers with fake jobs have formed a lucrative industry, generating billions of dollars in annual revenue, surpassing any other form of cybercrime. Human rights organizations estimate that hundreds of thousands of workers are trapped among them. But Chainalysis points out that the majority of the statistically significant growth comes from sex trafficking. Researchers have discovered a large number of detailed Chinese advertisements on Telegram, providing hourly, long-term, and even cross-border sexual services to destinations including Macau, Taiwan, Hong Kong, and others. Some advertisements even openly mention suspected minors, such as "Lolita" and "real high school students". Transaction data shows that funds flow to organizations that control a large number of women and minors, rather than independent sex workers: 62% of routine transactions involve amounts between $1000 and $10000; Nearly half of cross-border transactions involve amounts exceeding $10000. We're not talking about pimps who control three to five people, "McLouth said," but the scale of hundreds of victims. "Although cryptocurrency may have fueled the expansion of the sex trafficking industry, McLouth pointed out that the technology of tracking cryptocurrency through blockchain has also exposed this industry, which has long been operating rampant in the dark, to regulatory scrutiny for the first time. This allows us to glimpse one of the oldest crimes of humanity, now clearly visible, "McLouth said. In the fraud park chain of human trafficking, Chainalysis also found that in human trafficking in the fraud park, Telegram clearly marked the price of "introducing labor": $8888 to $22000 per person. The 7th Park has made a strong entry into the market, and we welcome all intermediaries to compare prices and consult. "This is the translation of a Chinese message on Telegram recruiting Chinese staff for a park in Cambodia. According to a whistleblower who contacted "Wired" magazine from within the fraud zone last year, workers who are required to be able to type, have good physical health, speak standard Mandarin, have no false materials, and have no mental illness... will be directly recruited by the park, interviewed on-site by the company, and their salaries will be settled immediately. "The workers who are sold are usually confiscated their passports by the park manager and forced to work 15 to 16 hours a day to carry out fraud against Western victims through text fraud information. Some people are trapped in debt bondage, while others are directly imprisoned in walled parks. Once they violate regulations or fail to meet fraud targets, they will be beaten and electrocuted. This is a Chinese post on Telegram that provides sexual services, which details the body information of the relevant personnel and the sexual services provided. Image provided by Chainalysis. Erin West, former prosecutor of Santa Clara County, California, pointed out that in the human trafficking industry supported by cryptocurrency, whether it is sexual exploitation or fraud zones, there are two common characteristics: using Telegram as a trading platform and stablecoins - according to other reports, especially the mainstream stablecoin Tether - as payment tools. Erin West is currently responsible for an anti fraud organization called 'Operation Clover'. She stated that these two companies could have taken more measures to avoid facilitating human trafficking: Telegram could have banned related accounts, while Tether, which is a centralized currency different from Bitcoin, could have seized or frozen its assets. But she believes that both companies are condoning these criminal activities and continuing to use their platform tools. Why can Telegram and Tether profit from exploiting humans with peace of mind? They were well aware that all of this was happening. Funds circulate on their platform, and related transactions are conducted on public channels. West said, "We can clearly identify some core perpetrators who, as long as they can be contained, can significantly weaken people's public discussion and payment for these terrorist acts." After contacting Tether about their role in human trafficking, the other party stated in a statement: "We condemn human trafficking, forced labor, and sexual exploitation in the strongest possible terms, and we have a zero tolerance policy towards the misuse of USDT and related technology to assist in such crimes. The statement mentioned that Tether has collaborated with 330 law enforcement agencies worldwide in over 2000 cases, freezing approximately $4 billion worth of Tether and reissuing nearly $1 billion for asset recovery and victim compensation. Tether also stated that it collaborates with multiple United Nations related projects and provides financial support, which focus on combating human trafficking and fraud activities. It is necessary to distinguish between criminal misuse of financial instruments and the instruments themselves, "Tether's statement reads." Stablecoins, like all widely used financial instruments, may be used by criminals. However, public blockchain provides law enforcement with a certain degree of transparency and traceability, which is completely lacking in cash based trafficking networks, and cash transactions are still the main payment method for such crimes worldwide. "When contacted by Telegram, the company responded in a statement:" Telegram's terms of service clearly prohibit criminal activities such as human trafficking and money laundering. Once discovered, we will immediately delete relevant content. The company also mentioned the platform's audit statistics page, as well as the ban on the "New Coin Guarantee" and larger black market "Hui'an Guarantee" Telegram channel in May last year. In fact, in the following months, both black markets made a comeback: New Coin Guarantee rebuilt the Telegram channel, and Hui'an Guarantee was renamed Potato Guarantee. ）Telegram's statement states, "In addition to receiving reports from users and non-governmental organizations, Telegram has a large review team that actively monitors the platform with customized AI tools, clearing millions of harmful content every day. Cryptocurrency tracking company TRM Labs recently pointed out that the new coin guarantee seems to have realized the risk of facing a longer-term ban on Telegram, and has transferred some of its business to another instant messaging software called SafeW, but its core business still runs on Telegram. Chainalysis' research on human trafficking also involves the use of cryptocurrency in the trading of child sexual abuse materials. This type of transaction accounts for a much smaller proportion of total cryptocurrency transactions, but its harm to underage victims cannot be measured in monetary terms. Chainalysis found that about half of the transactions for child sexual abuse materials amounted to less than $100, highlighting the fact that such materials - including AI generated content - have become extremely cheap and easily accessible. What is even more disturbing is that some child sexual abuse content from abusive online communities such as "heart wrenching" is increasingly appearing on commercial trading platforms, sold through cryptocurrency. These communities often use sexual extortion to force minors to shoot explicit videos. Chainalysis found that, unlike other reported cases of sex trafficking and human trafficking in fraud zones, such transactions of child sexual abuse materials are still primarily conducted in Bitcoin, although most trading platforms now use Monero - a highly difficult to trace "privacy coin" - to launder profits. The Internet Watch Foundation, a British non-profit anti child sexual abuse organization with research cooperation with Chainalysis, said that since it began tracking the relevant cryptocurrency market five years ago, the use of cryptocurrency to trade child sexual abuse materials has continued to rise. Although Bitcoin has traceability, its cross-border payment features allow operators to host related content in other countries, typically the United States, greatly increasing the difficulty of enforcement. "It's easy to operate, and it's cross-border." said an analyst of the Internet Watch Foundation who asked for anonymity because of his job sensitivity. "You can be at one end of the world, but you can operate these services at the other end." Chainalysis believes that although cryptocurrency encourages human trafficking, it is worrisome, but it also provides an opportunity for law enforcement to crack down on the industry. Chainalysis' McLouth stated that the weak links that can be targeted include the centralized stablecoin system used by traffickers, as well as the multi billion dollar guarantee market running on Telegram, which provides a channel for these exploitative industries to cash out. These are excellent entry points for law enforcement agencies to crack down, "McLouth said," but they must accelerate their actions and invest more resources to understand the entire operational model, as criminal methods are still evolving