Stablecoins are a popular way of avoiding the crypto world's legendary volatility.

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One of the most well-known facets of the cryptocurrency world is its legendary volatility. With the market being vulnerable to spectacular crashes, things like COVID, the MTGox and other newsworthy events have all played their part in bringing massive fluctuations to the market.

While in the early days, Bitcoin (BTC) was the cyber criminals' crypto of choice, there’s recently been a huge leap in the number of people turning to stablecoins for this job instead. Coming with their own background tale as well as limitations and problems of their own, the tale of stables is still pretty interesting. Covering drugs, weapons and even nuclear programs, the world of dark web money can be a murky one. Let’s check it out.

Why Stables?

Originally designed to be pegged to the US dollar to provide a “stable” price that allowed users to conduct worldwide transactions with simple fees and little price volatility, stablecoins were originally designed to provide resiliency around pricing in the crypto world. With large market fluctuations of triple-digit percentages not being uncommon, allowing the market to dictate the terms in this scenario makes it extremely difficult to transact with any form of accuracy at scale.

However, one of the most confusing things around stablecoins for newcomers is the sheer range of different coins spread across different chains. Solana stables won’t work on Ethereum and vice verse although you can still use bridging services to help if this is your desired outcome.

In the trading world, it’s not uncommon to use stablecoins for trading as well. This allows you to quickly take profit while being insulted from the risk of further market fluctuations while buying back in at a consistent rate later on. So as we can see, despite the downsides, they do have their place in the world of blockchains.

The Dark Side

It’s that dark side specifically though that we are here to explore, and with that said there are more than a few incidents that have come to light regarding stablecoins in recent years and interestingly enough they cover everything ranging from low-end pig butchering and ransomware scams all the way through to state-based cybercrime activities.

One of the more notable issues came in 2019 with the Bitfinex scandal. After trading USDT since 2015, the Bitfinex exchange came under fire when it came to light that it had been Tether to offset losses of over 850 million dollars. This caused shockwaves through the market and left many questioning the need and role of stablecoins on a long-term basis.
It’s also believed the USDT is one of the main payment and exchange methods that allows the human trafficking and cyber scam industries to not only exist but thrive. In fact, in 2023 over $225m USDT worth of stablecoins were frozen on-chain at the request of the United States Secret Service when it was proven that the money was obtained by perpetuating pig butchering and other cybersecurity scams like phishing.


While crime always finds a way, it’s fair to say that stablecoins give crime syndicates the ability to move money across borders, quickly and easily.

Stability, When It Suits

Despite offering much when it comes to insulating its users from price liquidity, the truth is that some stablecoins aren’t in the least stable when you start to apply some pressure to the system.

While there’s been more than a few stablecoins that either failed or faced significant issues the 2018 Tether incident is probably one of the best known. Linked to the original Bitfinex incident mentioned earlier in the article, perceived credit risks within the market caused large shifts within a short window.

Due to the concern over these issues, the price of Tether eventually de-pegged and dropped to 88c during the worst of the instability. During this time, many traders offloaded their Tether for Bitcoin, due to the perception of it being a more stable asset considering the circumstances. While Tether would eventually recover its normal pegged value, for many the damage was done and large amounts of trust were lost as part of the incident when looked at in context with earlier issues.


One of the other concerns facing Tether in particular, was the linking of its cryptocurrency to high-level cybercrime syndicates. While low-level crime has always been a thing, this high-end usage proved a specific problem as it was believed that Tether had been used to bypass state-based sanctions, some of which is believed to have aided the North Korean nuclear weapons program and aided Russian oil producers to bypass sanctions while continuing to sell oil for profit.

Despite the controversy the world of crypto can often bring to the table, it’s pretty clear at this point that bad actors are also able to find benefits by leveraging the system for financial gain.

Still Useful

Despite these limitations, the concept of stablecoins is still very useful, and in the present day market information seems to substantiate this belief. Despite constant concerns about depegs and the overall backing of the stablecoin system, growth levels year on year remained consistent and eventually reached over 2.8 billion in value over a 12 month period ending in 2018.

Because of this, and the other inherent advantages that can come with minimizing volatility during trading and long-term value storage, it’s reasonable to expect that stablecoins will continue to play a large part in crypto ecosystems in the years to come. Will they remain “stable” in terms of value though? Only time can tell.

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