Stablecoins’ dark side is out in the open, and no one in fintech wants to talk about it. Readers ask me why I am anti-stablecoin. The answer is I’m not. I like them for legal transfers, but their use in Southeast Asia in support of human trafficking, pig-butchering scams, and drugs is impossible to remain silent about.
a blog article by Richard Turrin, Fintech, AI and Innovation Consultant
But what upsets me the most is that when the UN points out the damage stablecoins do, as in the July 2026 UNODC threat assessment on Southeast Asia, no one in the fintech world seems to listen.
Who dared to cover this report in the news or on fintech social media channels?
In polite fintech circles, the debate is limited to payment efficiency, as though the damage stablecoins create doesn’t exist.
Chainalysis tells us that all is well and that illicit use of crypto, including stablecoins, accounts for a manageable 1% of the total. A mere rounding error that proves the industry is clean.
They now put illicit crypto at $154 billion, a 162% jump, with stablecoins accounting for 84% of that volume, driven largely by Southeast Asian fraud schemes and “pig butchering” operations.
But if you read Chainalysis’ fine print, they admit they undercount, because they don’t count crimes such as drug and human trafficking, or when crypto is used mainly as a payment or laundering method.
1%? Tell that to the 300,000 humans trafficked in the scam compounds and the people defrauded by pig butchering scams, which are propped up by P2P stablecoin transactions that hide billions in illicit profits.
The problem is that stablecoins don’t just aid the scam business; they are the business because they allow it to scale.
The UN report is blunt about what powers Southeast Asia’s crime and how one rail dominates. “USDT-on-TRON offers near-zero transaction fees, settlement finality within seconds, and critically, operates outside the regulatory perimeter of traditional financial institutions.”
Let that sink in. Tron and USDT are operating not just with impunity, but with cheerleading from their supporters in the West and without pressure to change.
So my question is: with all the articles you read about stablecoins, how come none of them mention a UN investigation that clearly names USDT and the Tron network as facilitators of illicit transfers?
Where is the indignation?
Fintech, which prides itself on doing good, won’t even address that stablecoins in the wrong hands enable drugs, human trafficking, and pig butchering.
Instead, we are told that stablecoins are infrastructure and everything is just fine.
See the problem?
Fintech has many success stories, but they are offset with the negatives that we see in the industry. So in that sense stablecoins are not unique. My concern is that we don’t spend enough time analyzing the negatives and that the narratives are controlled by proponents who don’t acknowledge them. That’s particularly true for stablecoins which are supported by crypto proponents who have a long history of ignoring the down sides.
Stablecoins allow the scammers to sidestep the banking system and scale that these scammers have morphed into large corporations. Without stablecoins they couldn’t scale, that’s the point. If they tried to scale with bank transfers rather than stablecoins they’d have a limit based on fake import-export bank transers and more traditional means of money laundering. With stablecoins, there is no limit.
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South-East Asia’s criminal ecosystem has undergone a fundamental restructuring, according to a new report by the UN Office on Drugs and Crime (UNODC). Once-fragmented, locally rooted syndicates have merged into a single transnational, tech-driven criminal economy sophisticated enough to outpace conventional law enforcement and threaten governance, economic stability, and development in the region and beyond.
“What we are seeing is a shift in which groups that stayed within their own geographic domain and criminal specialty are now operating across multiple illicit markets at once, relying on the same service streams,” said Delphine Schantz, UNODC Regional Representative for South-East Asia and the Pacific. “Their operating model looks like corporate franchising: imagine specialized departments for laundering money, trafficking people, smuggling migrants, and harvesting data, all plugged into the same, service-based interconnected network.”
United Nations – Office on Drugs and Crime:
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