Stablecoin

What is a stablecoin?

A stablecoin is a crypto coin that ties its value to an underlying value, for example one dollar per coin. Well-known examples are USDT and USDC. The peg is maintained with reserves or with rules built into the software. As a result a stablecoin behaves differently from, say, bitcoin, whose price can move sharply.

Why do fraudsters often use stablecoins?

Because the value stays stable, fraudsters can move amounts without the risk of the price falling in the meantime. Stablecoins are also fast and easy to send on many platforms, which makes them attractive for funnelling money.

What is a stablecoin?

A crypto coin that aims to hold a fixed value, usually pegged to the euro or the dollar. The peg is maintained by an issuer, not by the market.

Is a stablecoin always stable?

Not by itself. The stability depends on the backing and on confidence in the issuer. There are examples of stablecoins that lost their peg.

Can a stablecoin be frozen?

With several types the issuer can freeze a balance. That happens at the request of an authorised body. We make no commitments about it and only describe what is technically possible.

Why do stablecoins appear so often in fraud?

Because a fixed amount looks clear and the victim sees no exchange rate risk. That makes the story easier to tell and the deposit larger.

Why these coins turn up in so many routes

Value that stays roughly stable is convenient for exactly the same reasons on both sides of a case. Someone moving proceeds does not want to watch them fall while a route is being laid, and someone paying out wants a figure that still means something a week later. That is why so many fraud routes pass through such a coin at some point, usually in the stretch between a first deposit and a cash-out. For an investigation this is helpful rather than obstructive: the amounts stay comparable, so a route can be described in figures that a reader recognises.

There is a second feature that matters more than it looks. Because most of these coins are issued by an identifiable party rather than by an open network, that issuer can in principle freeze specific holdings at the request of an authority. Whether that happens depends on the issuer, the jurisdiction and the speed of the request, and it is not something anyone should promise in advance. What it does mean is that reporting quickly and precisely can occasionally do more here than on a network where nobody is in a position to intervene at all.

In a report we therefore note the issuer alongside the amount and the network, because those three together determine who could act if anyone can. Leaving the issuer out makes a route look more anonymous than it is.