Is Decentralisation Making Crypto Hard to Police?

According to the Chainalysis 2026 Crypto Crime Report, cryptocurrency payments linked to suspected human trafficking services increased by 85% in 2025, amounting to hundreds of millions of dollars. The report highlights that the actual impact is measured in lives affected rather than monetary transfers.

The growth is attributed to scam compounds in Southeast Asia, online gambling sites, and Chinese-language money laundering networks operating via Telegram. These networks are illegal with a global reach. Unlike cash, blockchain transactions provide a visible trail, allowing investigators to trace transactions when a wallet address is linked to an individual or group. Companies like Chainalysis analyze these patterns to assist law enforcement in tracking criminal networks.

Telegram-based international escort services suspected of trafficking Labor placement agents connected to forced scam work Prostitution networks Child sexual abuse material (CSAM) vendors

Payment patterns vary across these groups, with stablecoins prevalent in escort and prostitution services, while Bitcoin remains favored by CSAM vendors.

Approximately half of the transactions related to Telegram-based international escort services exceed $10,000, indicating large-scale operations. Prostitution networks show around 62% of payments between $1,000 and $10,000. Labor placement agents associated with scam compounds utilize Telegram to lure victims with fake job offers, forcing them into online scams under the threat of violence. Recruitment payments generally range from $1,000 to $10,000. Chainalysis identified an administrative account related to the Fully Light Group, previously noted by the United Nations Office on Drugs and Crime for illegal activities.

CSAM networks have shifted toward subscription models, with about half of the transactions under $100. This lowers the consumer entry cost and creates predictable monthly revenue for operators. In 2025, many networks continued accepting mainstream cryptocurrencies, with Monero increasingly used for laundering proceeds. In July 2025, Chainalysis identified a significant dark web CSAM website with over 5,800 cryptocurrency addresses, generating over $530,000 since July 2022.

Chris Hughes, Hotline Director at the Internet Watch Foundation, reported identifying 312,030 instances of child sexual abuse content in 2025, marking a 7% increase from the previous year. Most clearweb sites accepting virtual currency for such content are hosted in the US, with the dark web following. Payment information identified on commercial websites is shared with global law enforcement to disrupt criminal activities.

Decentralization and Cryptocurrency Regulation

Decentralization is often cited as a challenge in policing cryptocurrencies. However, public blockchains are inherently transparent, making transactions more traceable than cash. The main issue lies in fragmented regulation and inconsistent enforcement across jurisdictions, providing opportunities for criminal exploitation. Regulated financial firms that adhere to strict compliance standards are crucial.

M4Markets operates within regulated frameworks, maintaining rigorous anti-money laundering, transaction monitoring, and client due diligence processes. The focus should be on strengthening oversight of central access points like exchanges and brokers, along with international coordination. As regulation matures, blockchain transparency will increasingly aid law enforcement.

Cryptocurrencies' decentralized nature makes covering tracks difficult. Investigators can use blockchain analytics to reconstruct schemes. However, many countries lack access to advanced investigative tools and specialists in crypto-related crimes. Despite some cooperation between authorities and analytics software developers, private investigators often outperform government analysts in speed and effectiveness.

Based on reporting by techround.co.uk.