How are blockchain and cryptocurrencies impacting carding? (New challenges and opportunities for scammers)

[Student]

For educational purposes, I will provide a more detailed analysis of how blockchain and cryptocurrency are impacting carding, including new opportunities and challenges for fraudsters, as well as technical and legal aspects. Carding, as a form of cybercrime involving the use of stolen bank card data for unauthorized transactions, is actively evolving under the influence of blockchain technologies and cryptocurrencies. This analysis is intended to understand the mechanisms, not to encourage illegal activity, and includes examples, statistics, and forecasts based on the latest data.

What is carding?​

Carding is a fraudulent activity in which criminals use stolen credit or debit card information (card number, CVV, expiration date, cardholder name) to make purchases, withdraw money, or launder funds. Common methods include:

• Phishing: sending fake emails or creating fake websites to steal data.
• Skimming: installing devices on ATMs or card reading terminals.
• Database hacks: data breaches of retailers or banks (for example, Target in 2013 - leak of 40 million cards).
• Purchasing data on the darknet: Carders purchase "dumps" (complete card data) or "fulls" (data with addresses) on sites like AlphaBay or Dread.

According to the Chainalysis 2024 report, the carding market has reached $2.1 billion, 30% of which is related to cryptocurrency transactions. Blockchain and cryptocurrencies have radically changed this landscape, creating both new opportunities for scalable fraud and barriers due to the transparency of the technology.

New opportunities for scammers​

Blockchain and cryptocurrency provide carders with tools to anonymize, speed up, and scale their operations. Here are some key aspects, with examples:

1. Quick cashout through crypto-onramps​

Cryptocurrency exchanges (e.g., Binance, Coinbase, Kraken) allow the conversion of fiat money into cryptocurrency, which has become a primary channel for carders. Fraudsters use stolen cards to purchase cryptocurrency, which they then transfer to anonymous wallets.

• Mechanism: The carder purchases BTC or USDT on the exchange using a stolen card through a fake account. The funds are transferred to a non-custodial wallet (e.g., MetaMask), and then to another address through several transactions.
• Example: In 2023, a group of carders from Eastern Europe used stolen cards to purchase $10 million in USDT on P2P platforms, bypassing KYC with fake documents. The funds were then converted to fiat through local exchanges in Asia.
• Impact: According to Elliptic, 40% of all cryptocurrency card transactions are processed through P2P platforms. The speed of transactions (less than an hour) and low fees (0.5–2%) make this an attractive alternative to traditional bank transfers (3–5 days, fees up to 5%).

2. Anonymization through mixers and DeFi protocols​

Blockchain protocols such as mixers (Tornado Cash, before its ban in 2022) and decentralized finance (DeFi) allow funds to be laundered while obscuring their origin.

• Mechanism: Carders transfer crypto through smart contracts that split and mix funds with other transactions. For example, in DeFi protocols like Uniswap or Aave, funds are converted into tokens and then sold on secondary markets.
• Example: In 2024, carders used Curve Finance to exchange USDT for DAI and then sold DAI for NFTs on OpenSea. This created a gray area where tracking became difficult due to the multiple addresses.
• Impact: According to Chainalysis, 15% of all laundered funds in 2024 ($1.2 billion) passed through DeFi. Despite bans, mixers still exist in the form of forks like YoMix, making them popular among carders.

3. Fake platforms and "pig butchering" schemes​

Carders create fake crypto exchanges, wallets, or ICOs by luring victims through social media or phishing websites.

• The mechanism: Victims enter card details to "invest" in cryptocurrency, which are then stolen. Simultaneously, carders use the stolen cards to purchase tokens on these platforms, disguising them as legitimate.
• Example: A pig butchering scheme in 2024 resulted in $3.5 billion in losses, where scammers used Telegram to convince victims to "invest" in fake tokens, using stolen cards to simulate activity.
• Impact: These schemes combine carding with social engineering, increasing fraudsters' profits by 300% over three years, according to the FBI.

4. Darknet markets and automation​

Darknet forums (Dread, Dark0de) sell card data, carding tools, and money laundering services for cryptocurrency.

• Mechanism: Carders purchase "dumps" for BTC (price: $10–50 per card) and use automated scripts to check the validity of cards (carding bots). "Fraud-as-a-Service" services include ready-made tutorials and software.
• Example: In 2025, "Carding 101" kits were sold on the Dread forum for 0.001 BTC, including access to brute-force bots and lists of vulnerable stores.
• Impact: The availability of tools has lowered the barrier to entry: newcomers can start carding with minimal knowledge, increasing the number of attacks by 150% since 2020.

5. Crypto-integrated carding​

Carders buy physical goods (electronics, clothing) with stolen cards and resell them for cryptocurrency on platforms like Telegram or darknet markets.

• Mechanics: Purchase an iPhone for $1,000 using a stolen card, resell it for $700 in BTC. The crypto is then cashed out via P2P.
• Example: In 2023, a group from Russia sold $5 million worth of stolen goods through Telegram, receiving payment in USDT.
• Impact: This reduces the risk of chargebacks, as crypto transactions are irreversible, unlike banking transactions.

New challenges for scammers​

Blockchain and cryptocurrencies, despite their anonymity, pose serious obstacles for carders due to ledger transparency, increased regulation, and the development of analytics.

1. Blockchain Transparency and Analytics​

The blockchain is public and immutable: every transaction is recorded and can be traced using tools like Chainalysis, Elliptic, or Crystal.

• Mechanism: Analytics links wallet addresses to exchanges, IP addresses, and even real identities through cluster analysis. If a carder transfers funds to a regulated exchange, they can be identified.
• Example: In 2024, the FBI seized $1.7 billion in BTC related to carding while tracking transactions through Binance. Darknet carders were arrested after withdrawing funds through the KYC-certified exchange.
• Impact: According to Chainalysis, 60% of all crypto asset seizures between 2023 and 2025 are related to carding. This forces fraudsters to use complex schemes (bridges, cross-chain swaps), increasing costs.

2. Strengthening KYC/AML on exchanges​

Regulated exchanges require KYC (Know Your Customer) verification and anti-money laundering (AML) monitoring, making cashing out more difficult.

• Mechanism: Exchanges block accounts if fraud is suspected. Carders use fake IDs or deepfakes, but AI detection (Jumio, Onfido) detects 70% of such attempts.
• Example: In 2023, the Kroll data leak revealed that 20% of Binance accounts were fake, but the exchange froze $500 million in suspicious funds.
• Impact: Carders spend up to $100 to purchase verified accounts on the darknet, but the risk of being blocked is growing. P2P exchanges are also beginning to implement AML.

3. Regulatory barriers​

Global laws (MiCA in the EU, FATF Travel Rule) require transparency of crypto transactions, and mixers are prohibited.

• Mechanism: DeFi protocols are required to implement KYC; anonymous wallets are blocked. In Russia and China, crypto transactions are strictly regulated.
• Example: The ban of Tornado Cash in 2022 forced carders to look for alternatives like Aztec Protocol, but they are less reliable.
• Impact: By 2025, 80% of crypto platforms are expected to be AML compliant, reducing opportunities for anonymous money laundering by 30%.

4. Technical risks and vulnerabilities​

Blockchain technologies are complex and errors can lead to loss of funds.

• Mechanism: Attacks on smart contracts (such as reentrancy) or phishing wallet seed phrases can deprive carders of funds. Double-spending also requires in-depth knowledge.
• Example: In 2024, hackers stole $10 million from carders by hacking their MetaMask through phishing.
• Impact: Carders are forced to hire blockchain experts, which increases costs by 10-20% of profits.

5. Bank countermeasures​

Banks and payment systems (Visa, Mastercard) are implementing AI to detect fraud and block crypto transactions.

• Mechanism: Algorithms analyze purchasing patterns; suspicious transactions on crypto-onramps are blocked automatically.
• Example: By 2025, 50% of banks in the EU have implemented auto-blocking for crypto purchases >$500 without manual confirmation.
• Impact: Carders are forced to split transactions (e.g. $100 x 10), which reduces efficiency by 40%.

Future trends and forecasts (2025–2030)​

1. The rise of AI and deepfakes: Carders will use generative AI to create convincing fake IDs and bypass KYC. However, AI analytics from banks (such as Feedzai) will become more accurate, detecting 90% of such attempts by 2027.
2. Transition to privacy chains: Carders are migrating to blockchains with enhanced anonymity (Monero, Zcash), but their share of the total transaction volume is small (2% in 2024).
3. Card tokenization: CoFT (Card on File Tokenization) from Visa/Mastercard replaces card numbers with unique tokens, which will reduce data breaches by 50% by 2030.
4. Blockchain vs. Carding: Decentralized Identification (DID) systems can replace legacy payment systems by eliminating vulnerabilities like CVV.

Recommendations for protection​

For educational purposes, it is important to understand how to minimize the risks of carding:

• For users:
  • Enable two-factor authentication (2FA) on all accounts.
  • Monitor transactions through banking apps.
  • Avoid entering card details on unverified websites.
  • Use virtual cards for online purchases.
• For business:
  • Implement tokenization (CoFT) to protect card data.
  • Use AI fraud detection (e.g. Sift, Riskified).
  • Conduct regular security audits.
• For regulators:
  • Strengthen monitoring of P2P platforms.
  • Develop international cooperation to combat darknet markets.

Conclusion​

Blockchain and cryptocurrency have made carding more sophisticated, faster, and global, providing fraudsters with tools for anonymity and scalability (mixers, DeFi, the darknet). However, blockchain transparency, enhanced KYC/AML, and advanced analytics pose significant barriers. In 2025, carding remains a profitable but risky industry: revenues are growing, but the likelihood of capture increases thanks to blockchain forensics. In the future, technologies such as direct identification (DID) and tokenization may radically reduce vulnerabilities, but for now, carding continues to adapt, balancing opportunities and challenges. This analysis highlights the importance of awareness and data protection in preventing cybercrime.

 

[BadB]

An Introduction to Carding and the Role of Blockchain​

Carding is a type of fraud in which criminals use stolen credit or debit card information to make unauthorized purchases, often with the goal of cashing out through the resale of goods or gift certificates. Traditionally, this involves stealing card numbers, CVV codes, and expiration dates through phishing, skimming, or database hacks. According to reports, the carding market grew by 116% to $1.9 billion in 2020, and this trend continues. Blockchain and cryptocurrencies (BTC, ETH, and others) are radically changing this industry: they create new opportunities for fraudsters by allowing anonymous and rapid money laundering, but they also introduce challenges related to transaction traceability and enhanced security measures. Below, we will examine the key aspects.

New opportunities for scammers​

Blockchain provides decentralization, pseudonymity, and global accessibility, making it ideal for the evolution of carding. Fraudsters integrate crypto into their schemes, making them faster and more difficult to trace.

Opportunity	Description	Examples and influence
Fast cashout through crypto-onramps	Stolen card details are used to purchase cryptocurrency on exchanges (for example, through fake accounts). The funds are transferred to anonymous wallets and converted into fiat.	Banks often block 50% of cryptocurrency transactions, but fraudsters circumvent this by using fake accounts. This speeds up the schemes: transfers take minutes instead of days via SWIFT. Losses from such frauds increased by 200% in 2022 to $2.57 billion.
Anonymous laundering through mixers and DeFi	Crypto is disguised through services like Tornado Cash (before the ban) or DeFi protocols, where funds are split and mixed.	Carders purchase NFTs or tokens with stolen funds and then sell them on the black market. This complicates tracking: the blockchain is public, but pseudonyms obscure the owners.
Scaling through fake platforms	Creating fake crypto exchanges or ICOs to lure victims, where carders use stolen cards for "investments."	Pig butchering schemes: Fraudsters build trust through social media, then steal card details for "trading." In 2024, such attacks resulted in losses of over $3 billion.
Integration with darknet markets	Selling stolen card data for crypto on forums like Dread.	"Fraud-as-a-Service" whales with carding and crypto-laundering tutorials are available for $30–$100. This democratizes fraud, making it accessible to beginners.

These opportunities enhance carding: crypto eliminates intermediaries, reducing fees and the risk of chargebacks. Fraudsters are now focusing on "item carding"—buying goods with stolen cards and selling them for BTC.

New challenges for scammers​

Despite its advantages, blockchain introduces barriers: its immutability and publicity allow authorities to track flows, and regulations are becoming stricter.

Call	Description	Examples and consequences
Transaction traceability	All transactions are recorded on a public ledger; analytics (Chainalysis) allows for wallet deanonymization.	The FBI uses blockchain forensics for confiscation: in 2023–2024, they recovered over $1 billion. Carders are at risk if the funds are sent to regulated exchanges.
Strengthening KYC/AML on exchanges	Exchanges (Binance, Coinbase) require verification; fake accounts are easily blocked.	Black markets sell verified accounts for $30, but breaches (Kroll 2023) lead to mass bans. Fraudsters spend more on bypassing.
Regulatory barriers	EU MiCA and US Treasury laws require KYC in DeFi; mixers are banned.	In Russia and China, crypto is under control; carders face asset seizures. Fines for non-compliance are expected to increase in 2025.
Technical risks	Attacks like eclipse or long-range forks allow double-spend, but require expertise.	1 in 20 failed ID checks is a deepfake; AI scammers are evolving, but blockchain analytics are catching them. Losses from internal fraud in crypto are 5% of revenue.

Banks now block crypto purchases as "fraud alerts" without an override option, making it more difficult to onboard stolen funds. As a result, carding is evolving into hybrid schemes, but with an increased risk of being caught.

Conclusion​

Blockchain and cryptocurrency are transforming carding from a localized fraud into a global, anonymous business, opening the door to innovations in money laundering (DeFi, mixers), but also increasing challenges through traceability and regulation. For fraudsters, this is a double-edged sword: ease of entry is combined with the risk of permanent traces on the ledger. In 2025, with the rise of AI and deepfakes, schemes will become more sophisticated, but tools like blockchain analytics (Aware, PeckShield) will give authorities an advantage. To minimize risks, users are advised to use MFA, transaction monitoring, and avoid suspicious onramps. For businesses, this includes the integration of card tokenization (CoFT) and AI detection. In the long term, blockchain may even prevent carding by replacing legacy systems like Visa with decentralized ones, but for now, this is a battleground for privacy vs. security.