Venmo is essentially a stable coin
You could replicate USDC with a website where you log in with a password and move money between numbered accounts and they don’t run any AML/KYC checks on you. If you did that it would be super illegal. In fact someone did exactly this, it was called Liberty Reserve and everyone went to prison.
But because it’s got the magic of the blockchain laws don’t apply.
The government has existed for hundreds of years before these sophisticated mechanisms of surveilling the money system and the people were introduced. And it will continue to exist should they be removed.
If your concern is effective taxation, there are plenty of methods that worked historically while preserving financial privacy like property taxes.
Drugs should be legal, so that's not a problem. Terrorism and human trafficking are more complicated topics, but basically I think they should be attacked more directly, not financially.
By making non KYC transactions easier, above becomes much easier and crime, fraud, scams and corruption significantly more profitable.
Stablecoins' success is also a reaction to the ever-increasing friction created by overreaching regulation. If you have a supplier in China, and need to buy some in-demand goods, you can sign the contract and send the money now, whereas with the classic banking system, you'd have to wait for two weeks to clear everything. This alone is brilliant and should be welcomed for its usefulness.
Almost all the crypto I have is from p2p or freelancing. Very few could connect my identity and my wallets.
I think it would be wholly better, in democracies, if we changed laws we didn’t like than tried to create technology to evade them.
The main proponent that dictates the regulations, the FATF, is a shady, unregulated body that is used for political and economical repression.
Not all blockchains are decentralized, it depends on the consensus mechanism
What is your source for stablecoins being "for crime"? I've seen many individuals from countries all over the world utilize stablecoins in ways legal for their jurisdiction.
https://blockchain.bakermckenzie.com/2025/07/01/the-225-mill...
It’s slower, riskier, with less protection and usually more expensive than a classical financial transaction. So it self selects for criminals.
Stablecoins typically being self-custodial, easier to transfer in large amounts, and internationally accessible seem like it would support criminals, but with stablecoins, funds can be frozen just like bank deposits can.
This is emphasized in the article you linked:
> The investigation began in late 2023 when Tether, the issuer of the USDT stablecoin, proactively froze 39 wallet addresses containing $225 million in stolen USDT after detecting suspicious activity. This immediate action was critical in preventing further dispersion of the illicit funds. Paolo Ardoino, CEO of Tether, was quoted as saying, “Tether’s work with the Department of Justice underscores our commitment to transparency, proactive engagement with law enforcement, and the protection of users across the digital asset ecosystem.”
And the number you quoted is for cryptocurrency at large, not stablecoins. I imagine the number looks a lot different when we filter for that subset of usecases. For the large amounts used in stories like this, banks would be a better indicator for comparison[1][2]. Venmo, Cashapp, and Zelle have had their fair share of scandals as well[3].
[1] https://en.wikipedia.org/wiki/Wachovia#Latin_drug_cartel_mon...
[2] https://www.reuters.com/business/finance/td-bank-appoints-co...
[3] https://www.freep.com/story/money/personal-finance/susan-tom...
Yes classical finance has had scandals because they're obligated to prevent these things, and in general, they have responded to court judgements by upping their internal controls. Crypto is built specifically not to have either internal controls or the ability to institute them in a meaningful way. It's the fundamental premise. One system is designed to stop this activity but fails sometimes, the other is designed to allow this activity by anarchocapitalist libertarian ethos and offers roughly zero recourse for those caught up incorrectly.
This argument is tantamount to "well, a plane crashed, so obviously the FAA doesn't provide any value, and we should just stop regulating aircraft entirely and yolo it." Same with drugs, well, a side-effect happened, let's just scrap the FDA and legalize the grey market Chinese sackloads of $5 peptides. While we're at it, we should let Walgreens sell em, why not.
If you think what the classical institutions are doing is wrong, you shouldn't say well, just let 'em lol, you should be arguing for stricter penalties and more control. If you think it's right, well, I don't know what to say.
Pepperidge Farm remembers when nobody in their right mind would just give all their money to unregulated offshore banks in the Caribbean. Remind me why that was again?
It must end.
The other major issue is it’s easy to get the stablecoins, move them around, cash them out, and by the time Tether freezes them the criminals have already been paid (in dollars, which is what they want really).
Also notice there's no option to automatically transfer received money into your real checking account. They are banking on you forgetting your money is there and they are earning the interest but not passing it to you.
For this reason I prefer receiving money via Zelle but pay with Venmo.
But the smart contracts they write look up a blacklist, which only they control. They can block, unblock or burn tokens.
To “reverse” something they could burn those tokens, and then just issue more and send the new ones to the original address.
So yeah it’s like PayPal or whatever. Except with blockchain thrown in so they can say the rules don’t apply to them.
The “solution” for decentralisation - proof of work - makes the system a lot more expensive (think: higher fees) than a centralised database.