What Is Cryptocurrency Gambling Ring?

What Is Cryptocurrency Gambling Ring?

Just like in different activities across the world, illicit acts can also be found in the world of gambling, and they exist in the form of rings where they perpetrate their illegal activities. What is cryptocurrency gambling ring? A cryptocurrency gambling ring can be described as a group of people who conduct illegal gambling activities while taking advantage of the decentralized and pseudonymous nature of cryptocurrencies to operate outside the realm of traditional financial regulations and licensing requirements so as to prevent authorities from tracking their financial activities. At PlasBit, we are focused on the safety of our readers so dive into the article to understand more about gambling rings.

Is Investing in Crypto a Form of Gambling?

Because of the extreme risk and volatility associated with cryptocurrency investing, it is occasionally likened to gambling, and since significant speculation is involved in both activities, unpredictable outcomes could yield large wins or losses. Similar to gambling, hype, and news in the market can affect cryptocurrency investments. Investing in cryptocurrencies can also be predicated on well-informed choices, thorough investigation, and evaluation of the project's fundamentals, market trends, and technological advancements. Even while both forms are based mostly on chance, strategic crypto investing differs from pure gambling in that it involves planned risks and sound judgment.

How Do Cryptocurrency Gambling Rings Operate?

Cryptocurrency gambling rings function by using the decentralized, anonymous, and secure characteristics of digital currencies to enable wagering activities. These platforms are appealing to users who want privacy and want to evade legal constraints because they frequently operate outside of regular regulatory frameworks. What is cryptocurrency gambling ring, and how does it operate? We at PlasBit will give you a closer look at the operations of these gambling rings and the reasons behind their growing appeal.

1. Through Decentralized Platforms

Cryptocurrency gambling rings, in contrast to traditional online casinos, are frequently operated on decentralized platforms under government licenses. Since these blockchain-based platforms don't have a central authority, it is more difficult to regulate them.

2. Through Peer-to-Peer (P2P) Gambling

P2P exchanges allow cryptocurrency gambling rings to operate easily so players use cryptocurrencies as the wager and establish direct connections with one another in order to gamble. This gets rid of the requirement for an intermediary and the associated expenses.

3. Through Custom Software

Some of these gambling rings create their own gambling software and provide sports betting, slots, and dice games. These games they provide are often provably fair, which implies that the results are mathematically verified as random.

4. Through Smart Contracts

Smart contracts are used by a lot of cryptocurrency gambling rings to automate and safeguard transactions. They lessen the possibility of fraud and manipulation by automatically executing rewards in accordance with pre-established regulations, ensuring fair play.

Why Do People Prefer to Use Them?

Online gambling now has more options due to the rise of cryptocurrency, which has created a potentially risky but also exciting environment. Although cryptocurrency gambling rings give gamblers a distinct experience, there are concerns due to their opaque nature. Here, we will discuss the internal structure of these rings and explore the reasons behind people's participation despite the risks. Some popular reasons include:

  • Anonymity: Traditional online gambling platforms often require extensive personal information and banking details, which can deter users concerned about privacy. However, cryptocurrency gambling rings offer a higher level of anonymity in such a way that all transactions are pseudonymous, and this leads to effective protection of user identities.
  • Security: The security features of blockchain technology which is used by crypto gambling rings, including encryption and decentralized ledgers, provide a more secure environment for transactions. It helps to reduce the risk of hacking and theft, which are prevalent concerns in the world of online gambling.
  • Faster Transactions: Traditional payment methods often involve significant fees and delays in processing deposits and withdrawals. Cryptocurrency gambling rings, on the other hand, offer lower transaction fees and faster processing times, enhancing the user experience.

Popular Cryptocurrency Gambling Rings Busted by Law Enforcement

In this section, we will address a few cases where prominent crypto gambling rings came into the limelight. What is cryptocurrency gambling ring, and how were some of them discovered? Let us start with the $1.5b Chinese gambling ring scenario.

The $1.5b Chinese Gambling Gang Bust

In this case, the Chinese police in the city of Guangdong arrested hundreds of individuals involved in online gambling platforms that facilitated betting with $1.5 billion in cryptocurrencies, including Bitcoin. A sweeping law enforcement operation involving 21 public security authorities cracked down on organized football gambling during the football World Cup in 2018, res ulting in the arrests of some 540 individuals suspected of organizing online gambling rings. As gambling is illegal under Chinese law, participating in related activities leads to a criminal act.

The Guangdong Provincial Public Security Department made an announcement focusing on a particular anonymous online gambling platform that enabled wagers worth over $1.5 billion in Bitcoin. According to the statement, the gambling platform enabled betting in Litecoin, Ethereum's Ether currency, and Bitcoin, and over 330,000 people signed up within the eight months since it launched. Authorities charged that the network was accumulating wealth via a pyramid scheme that incentivizes users to refer others in order to increase their own commissions. They further stated that the bookmaker had altered the odds for online betting with regard to the size of the bets in order to give a select few persons the opportunity to win.

The $3.8b Vietnam Gambling Ring Bust

Ho Chi Minh City police detained 59 people tied to the biggest illegal online gambling ring ever uncovered by Vietnamese authorities. The cryptocurrency gambling ring had transactions totaling more than $3.8 billion, which includes the amount of money gamblers put in the ring and excludes reciprocal money from the dealer. It was reported that gamblers in the ring registered cryptocurrency wallets on a foreign platform called Remitano to buy cryptocurrencies such as Ethereum or USDT, also known as Tether, and then used the crypto to gamble on websites such as swiftonline.live and Nagaclubs.com. The guilty fellows admitted to authorities that they organized online gambling on those sites, which were intermediaries to international betting platform Evolution.com to earn commissions. According to them, when there was a large number of players, they crashed the websites in order to appropriate money from the digital wallets. Ho Chi Minh City Police also detained items, including 40 laptops, 79 cellphones, ATM cards, vehicles, and cash worth about $130k.

The $160M Hubei Gambling Ring Bust

The gambling operation, which authorities say utilized cryptocurrency, had a turnover of about $160 million and is believed to be the tip of the iceberg. The People’s Republic of China has treated gambling as illegal since 1949, so the main suspect and accomplices faced trial in the People’s Court of Shayang County, Hubei Province. Police began their investigations when a Chinese citizen from Hubei Province, Xiong Xong, alerted police to the fact that he was involved in mobile phone gambling where he won quite an amount but lost a lot later. The type of crime made it difficult for the police to investigate, requiring the examination of massive amounts of data. During their investigations, Chinese police discovered an extensive international crime organization that used cryptocurrency to conceal its behavior. After several efforts within two years, they were able to track them abroad and bring them to trial in the province.

Challenges Faced by Law Enforcement in Tracking and Shutting Down These Illegal Activities

The rise of cryptocurrencies has led to a new era of financial transactions, especially when it comes to gambling, and despite the convenience and anonymity offered by crypto gambling platforms, they have also become a haven for illegal activities, posing significant challenges for law enforcement. In this section, we will be discussing the challenges faced by authorities in their bid to track and dismantle these notorious crypto gambling rings.

1. The Anonymity Involved in It

The inherent anonymity and privacy provided by cryptocurrencies is one of the biggest obstacles facing law enforcement in their efforts to hunt down illicit cryptocurrency gambling operations. With cryptocurrencies, transactions can be carried out anonymously, in contrast to standard financial transactions, which are usually handled through identifiable bank accounts. Since users can open several wallets without disclosing any personal information, it is challenging for authorities to connect certain transactions to particular people. Moreover, the utilization of privacy coins such as Monero and Zcash, which utilize sophisticated cryptographic methods to conceal transaction specifics, adds to the difficulty of monitoring and tracking illegal activity by these gambling rings.

2. The Decentralization Feature Coupled With Borderless Transactions

Cryptocurrency's fundamental concept is decentralization, so its transactions are hard to track since they take place on peer-to-peer networks, which is in contrast to traditional financial institutions with centralized control. This opacity gives illegal gambling rings a degree of anonymity in their operations, and the inefficiency of traditional financial flow monitoring techniques makes it more difficult for authorities to spot suspicious actions. Moreover, transactions using cryptocurrency are not limited by location. Crypto gambling gangs can be set up and accessible anywhere with an internet connection, in contrast to traditional casinos so this makes it difficult for law enforcement to establish jurisdiction and coordinate operations across international borders because of its worldwide reach.

3. The Use of Shell Entities

Users of cryptocurrency wallets are not always required to disclose their true names. Certain platforms follow Know Your Customer (KYC) guidelines, but others don't and let users wager using fictitious names. Law enforcement finds it challenging to identify the individuals behind illicit gaming businesses because of this anonymity. Moreover, shell companies—businesses established purely for deception—can be used by cryptocurrency gambling rings. These organizations can be set up in offshore jurisdictions with weak laws, which would further conceal who owns the money and where it comes from.

4. The Evolution of Technology

The cryptocurrency space is continuously changing as frequently emerging protocols and technology open up new channels for illicit gaming operations. Law enforcement organizations find it difficult to stay up with this rapid innovation because crypto gambling gangs frequently move to new technologies or countries by the time authorities devise strategies to monitor and interfere with a certain platform. Furthermore, operators feel free to act whatever they choose because cryptocurrencies are decentralized. The belief that law enforcement agencies are unable to step in gives these gambling rings more confidence to carry out their illicit operations.

5. The Barriers Associated With Seizing Funds

It is extremely difficult to seize and reclaim funds from an illicit cryptocurrency gambling organization, even when authorities are able to identify it, and this is because cryptocurrency holdings are not kept in one place like traditional bank accounts. Because they are dispersed throughout a huge computer network, they are more challenging to confiscate. To make matters more complicated, cryptocurrencies are inherently volatile, so when money is finally seized by the authorities, it may have lost a lot of its value, making it more difficult to compensate victims for their losses.

What Is Cryptocurrency Gambling Ring?

Steps Taken by Law Enforcement Agencies To Prevent and Regulate Cryptocurrency Gambling Rings

The emergence of cryptocurrencies has brought about significant changes in a number of industries, including the gambling sector. Although cryptocurrencies have many benefits, such as low fees for transactions, anonymity, and quick transfers, they have also become a popular medium for illegal activities, such as unregulated gambling rings, which law enforcement agencies around the world have realized must be stopped in order to protect the public and safeguard consumers. The following are the major actions taken by these agencies to address the issues raised by cryptocurrency gambling rings.

1. Legislation and Regulation

The establishment of strong legal and regulatory frameworks is one of the main actions done by law enforcement. Laws that expressly target cryptocurrency gambling have been passed by governments to make sure that all operators abide by the law. Know-your-customer (KYC) procedures, strict licensing requirements, and anti-money laundering (AML) measures are common features of these legislations so authorities can keep an eye on and regulate the operations of crypto gambling sites by enforcing these restrictions, which lowers the possibility of illicit activity.

2. International Cooperation

Transnational gambling rings and their perpetrators are brought to justice through the collective approach of law enforcement agencies working through organizations like Interpol and Europol to share information, conduct joint operations, and develop common strategies to combat cryptocurrency-related crimes. Since cryptocurrency transactions frequently traverse national borders, it is difficult for a single country to tackle the issue on its own so as a result, international cooperation has become an essential strategy.

3. Technological Advancements

The use of cutting-edge technologies by law enforcement organizations to monitor and examine crypto transactions is growing so investigators can track movement of funds on the blockchain using blockchain analytics tools, which can spot odd trends and possible connections to illicit gaming. With the use of these instruments, authorities will be able to identify anyone hiding behind anonymous addresses and take appropriate legal action against them.

4. Public Awareness

Another crucial measure is educating the public about the dangers of unregulated cryptocurrency gambling. Financial regulators and law enforcement organizations have started public awareness campaigns regarding the possible risks associated with using illicit gambling services, and the purpose of these promotions is to educate consumers on the significance of using licensed platforms to guarantee their safety as well as how to recognize reputable operators.

5. Collaboration with Financial Institutions

In the battle against illicit cryptocurrency gambling, financial institutions are vital as they help to monitor and report dubious transactions. Law enforcement agencies collaborate closely with cryptocurrency exchanges, banks, and payment processors in order to achieve this. Authorities can also stop money from flowing to and from illegal platforms by working with these organizations to identify and stop transactions linked to illegal gambling.

Potential Consequences for Individuals Involved in Cryptocurrency Gambling Rings

While providing anonymity and accessibility globally, cryptocurrency gambling rings frequently operate in a legal gray area, drawing the attention of law enforcement organizations around the globe. People who engage in these kinds of acts may be subject to a variety of legal consequences, which differ based on the jurisdiction. What is cryptocurrency gambling ring most critical offense counts? The following are some possible offenses that these people could experience:

1. Illegal Gambling Operations

It is illegal to run or take part in an unauthorized gambling activity in many areas. Conventional gaming laws mandate that operators secure particular licenses in order to lawfully provide betting services. These laws are frequently broken by cryptocurrency gambling rings, which can result in accusations of running an unlawful gambling business. Heavy penalties, asset confiscation, and jail time are possible outcomes for offenders.

2. Fraud

In the world of cryptocurrencies, fraud is widespread, and gambling rings are no different. Operators may be charged with operating fraudulent operations, such as manipulating games so that the house always prevails or withholding player gains. Depending on the specifics of the scheme and the location, engaging in fraudulent actions may result in accusations of wire fraud, securities fraud, or other related felonies. Significant legal repercussions from convictions may include jail time and victim reparations.

3. Money Laundering

Because they allow users to hide their identities through pseudonyms, cryptocurrencies are frequently linked to money laundering. Cryptocurrency-based gambling rings may purposefully or unintentionally aid in money laundering operations. If it is discovered that the individuals in question are concealing the source of illegal funds by transferring substantial amounts of money through gambling businesses, they may face charges of money laundering. Serious repercussions from convictions might include lengthy prison terms and hefty fines.

4. Tax Evasion

Profits from gambling, especially cryptocurrencies related, are frequently taxable. However, because cryptocurrencies are thought to be anonymous, some people might try to avoid paying taxes on the money they win from gambling. Global tax agencies are getting better at tracking cryptocurrency transactions. If proven guilty of tax evasion, a person may be subject to harsh punishments such as jail time, fines, and back taxes.

5. Conspiracy

Conspiracy charges may result from involvement in a crypto gambling ring, particularly if several people are collaborating to run or promote the gambling platform. If there is proof of an agreement to carry out an illegal act, such as money laundering or tax evasion, conspiracy charges may be brought against the gambling ring. Also, sentences may carry heavy fines and prison terms.

Role of Crypto Exchanges in Cryptocurrency Gambling Rings

Because digital currencies are easily accessible and anonymous, cryptocurrency gambling has become increasingly popular. Cryptocurrency exchanges are essential to this emerging industry since they offer the services and infrastructure needed to support gambling, so the important features include:

1. Liquidity

Cryptocurrency exchanges are essential for supplying the liquidity required for gambling platforms to run efficiently. Players can effortlessly change their cryptocurrency holdings into a variety of tokens and coins that are used on gambling websites thanks to liquidity, and the smooth betting and wagering made possible by this fluid transaction mechanism draws more players into the gambling scene. Exchanges with high liquidity minimize the possibility of price manipulation and give gamblers the assurance that they can enter and exit their positions without experiencing severe slippage.

2. Anonymity and Privacy

The level of anonymity that cryptocurrencies provide is one of their primary appeals for gamblers. Crypto exchanges frequently have less stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) standards than traditional banking institutions, despite the latter's necessity for comprehensive personal information. Gamblers who prefer to keep their actions private will find this decreased barrier to entry appealing, so many smaller, less regulated exchanges remain popular among gamblers because they offer high levels of anonymity, even in the face of many major exchanges tightening their KYC/AML procedures.

3. Transaction Efficiency

Compared to traditional banking systems, cryptocurrency transactions are usually cheaper and faster, especially for international payments. In the case of worldwide gambling rings, this efficiency is vital as quick deposits and withdrawals improve the gambling experience for players. These transactions are made easier by cryptocurrency exchanges, which guarantee seamless money transfers between users' wallets and gambling sites. Utilizing blockchain technology also lowers the possibility of fraud by adding an extra degree of security and transparency.


Finally, you must carefully check out gambling platforms before using them to avoid falling into the trap of gambling rings. Not all countries focus fully on gambling activities, so you need to do proper research. We are certain that this article should have answered all your queries on what is cryptocurrency gambling ring. With everything we have highlighted, remember that gambling comes with risks, and you should follow the risk management strategies provided by PlasBit to protect your funds. You can read more about how to avoid scams when gambling in the article. Always be updated, and stay safe.

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