Elliptic reports on Dogecoin use by scammers and criminals

Elliptic researchers detected multimillion-dollar transactions tied to illicit activity in the meme cryptocurrency Dogecoin. The analytics company told ForkLog.

Researchers said that the overwhelming majority of ‘illicit’ Dogecoin transactions are linked to fraud, scams and Ponzi schemes. However, the coin is also used to finance terrorism, trade on the dark web, and in the distribution of CSAM (child sexual abuse material).

At the time of preparing the report, the company detected more than 50 separate thefts, pyramids and other forms of fraud, resulting in attackers obtaining Dogecoin worth hundreds of millions of dollars.

Last year Turkish authorities began investigating a scheme whose organizers vanished with 350 million DOGE. At that time, assets were valued at $119 million. In addition, the well-known financial pyramid PlusToken attracted 11 billion DOGE, a portion of which was later confiscated by Chinese authorities.

Experts stressed that the share of payments tied to illicit activity in Dogecoin, compared with other cryptocurrencies, is small. For example, researchers identified CSAM-related transactions in meme tokens totaling less than $3,000.

Researchers identified several malicious campaigns involving Dogecoin theft.

A malware for covert mining of cryptocurrencies on infected devices, Cliptomaner, also accesses the clipboard, replacing addresses copied into it with those controlled by attackers. The Dogecoin address associated with Cliptomaner has already received transactions totaling nearly $29 000.

Elliptic also identified several far-right organisations that used Dogecoin for fundraising.

In 2021, Israeli authorities issued an arrest warrant for cryptocurrency wallets believed to be controlled by the Hamas militant group (designated a terrorist organization in some countries). Law enforcement estimates that Hamas received donations, including in Dogecoin.

Dogecoin’s popularity has largely grown due to support from Elon Musk.

As of writing, the coin ranks 11th by market capitalization among cryptocurrencies, according to Coingecko.

In June, a US resident accused SpaceX and Tesla, as well as their chief, of promoting a “cryptocurrency pyramid” Dogecoin. He demanded payment of $258 billion as restitution and compensation.

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