Digital tokens on blockchain networks granting holders access to specific products or services. They are commonly used within decentralized ecosystems for transactions, community engagement, or other platform-specific functions.
Main/
Utility Tokens
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Code
IN0044
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Name
Utility Tokens
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Version
1.0
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Category
Crypto & Other Digital Tokens
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Created
2025-03-12
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Modified
2025-04-02
Related Techniques
- Criminals rapidly swap illicit funds into utility tokens on decentralized platforms, dispersing transactions across multiple protocols.
- These tokens often operate under low regulatory oversight, allowing pseudonymous exchanges that distance the funds from their criminal source.
- By fractionating funds into different utility tokens and ecosystems, offenders create a tangled audit trail that investigators find difficult to untangle.
- Criminals exploit the pseudonymous, unregulated swaps of various DeFi utility tokens to disguise the origins of funds.
- Rapid token exchanges via decentralized aggregators create convoluted transaction paths, blending illicit funds with legitimate user volumes.
- Minimal identity requirements help criminals evade oversight, concealing the ultimate beneficiary behind successive trades.
- Criminals exploit the inconsistent AML coverage of utility tokens to place illicit proceeds on-chain with minimal scrutiny.
- They obscure fund origins by repeatedly swapping or bridging these tokens across multiple blockchains, creating layered transactions that complicate tracing.
- DeFi protocols powered by utility tokens allow near-instant conversions and cross-border movements, hindering investigators' ability to track beneficial ownership.
- In certain jurisdictions, utility tokens are not regulated as payment tokens, reducing required customer due diligence and enabling criminals to circumvent reporting obligations for illicit transfers.
- Criminals exploit utility tokens on decentralized platforms to conduct multiple cross-asset swaps, layering illicit funds with minimal regulatory oversight.
- By rapidly exchanging tokens in different DeFi ecosystems, offenders create complex transaction paths, making it extremely difficult for investigators to follow.
- The quick issuance and transfer of these tokens facilitate low-value, frequent transactions across permissionless environments, adding layers of obfuscation.
- Perpetrators inflate the trading volumes of certain utility tokens through repeated self-trades, misleading other market participants about the demand and value.
- Marketing hype or false statements about a token’s potential can spur rapid price increases, which criminals exploit by selling their token holdings at the peak.
- By cycling illicit funds into these tokens, criminals can claim apparent investment returns once sold.
- Criminals exchange illicit funds for various altcoins classified as utility tokens, particularly on decentralized or lightly regulated platforms.
- Frequent conversions between multiple token ecosystems obscure the path of funds, contributing to a prolonged layering process.
- This repeated reinvestment into different tokens impedes the clear tracing of illicit proceeds, distancing assets from the underlying crime.
- Perpetrators create and heavily promote new utility tokens, enticing buyers with promises of platform access or rewards.
- After raising sufficient capital, they withdraw liquidity or dump their holdings, causing a near-instant token value collapse and leaving investors with worthless assets.
- Criminals create or market these tokens under the guise of providing a future product or service, then solicit funds from investors through an ICO/IDO model.
- After raising assets, they may abruptly abandon the project (exit scam) or use the token sale format to mix existing illicit capital, hiding its origin by blending tainted and legitimate contributions.
- In Rug Pull scenarios, criminals launch new utility tokens, marketing them as groundbreaking projects with massive growth potential.
- They aggregate victim funds in exchange for these tokens, then abruptly remove all liquidity, rendering the tokens worthless.
- Exploiting the hype and minimal due diligence around novel token offerings, perpetrators convert and launder victim payments before authorities or investors can respond.