Recently, Alexander Trentin of the Swiss business newspaper Finanz und Wirtschaft interviewed Snir Levi, CEO of NOMINIS, to discuss how criminals are increasingly using stablecoins to move and store billions in illicit financial flows, and what this means for the future of crypto compliance and global financial security.
Below is an English translation of the interview. The original article in Finanz und Wirtschaft can be found here.
Cryptocurrency financial flows are being professionally exploited by terrorists and criminals, explains blockchain analyst Levi. The digital underworld is therefore turning away from Bitcoin and instead seeking stable cryptocurrencies.
“Crypto service providers don’t care whether they are laundering proceeds from oil sales or drug money; they work for the commission.”
The digital underworld is flourishing in the crypto sector. Snir Levi, CEO of the analytics platform Nominis, which sells its services to banks and authorities to combat crypto crime, sees a highly professionalized shadow economy. His company maps billions of cryptocurrency wallets. It links blockchain data with intelligence-style analytical methods to uncover money launderers and terrorist financiers. Criminals are increasingly turning to value-stable cryptocurrencies known as stablecoins. Financial service providers are supporting terrorist groups such as Hezbollah, but also assisting drug cartels.
Mr. Levi, how has the landscape of illegal financial flows changed?
We are observing a shift away from volatile cryptocurrencies. We estimate that around 90% of illegal activities are conducted via stablecoins - cryptocurrencies that are pegged one-to-one to the US dollar. Tether on the TRON blockchain network is particularly popular because it is fast and inexpensive. We assume that illegal actors hold Tether worth billions of dollars. Criminals are seeking the stability of the dollar in digital form; this is not a niche phenomenon, but a shadow economy worth billions.
What is the source of this money?
We are tracking the laundering of proceeds from very tangible crimes. We see gold smuggling and drug trafficking in Venezuela with links to Hezbollah, as well as oil sales that finance Iran’s Revolutionary Guards. Digital wallets serve as the settlement layer for these transactions.
How professionally do groups like Hezbollah operate financially?
They are run like companies, not ideological groups. The people involved expect salaries, housing, and financial security for their families. If you cut off the money flow, you don’t just stop a weapons purchase - you disrupt their employment relationships. They rely on professional money launderers who work purely for the commission.
What role do Russia and Ukraine play in this ecosystem?
It’s complex. While Ukraine is the victim of aggression, its financial infrastructure is being abused. We see a thriving network of unregulated exchanges through which Russian funds flow via Ukrainian infrastructure to circumvent sanctions. Dirty money always finds the same open doors, regardless of where it comes from. We observe money flows to major hubs such as the sanctioned crypto exchange Garantex or via high-risk platforms like Rapira.
How effective are authorities at seizing funds?
There are successes, but we have a massive timing problem: the money is usually already gone. Illegal transactions can be tracked in real time, but by the time search warrants are issued, billions have already been moved. The global illegal crypto economy is estimated at around 120 billion US dollars; seizures are negligible in comparison.We often hear about ransomware attacks on companies.
Can extorted crypto payments be traced?
For victims, the situation is bleak. Companies often hire specialized firms to conduct negotiations. The ransom is almost never recovered. Recovery rates are under 5%. The funds are immediately laundered via unlicensed exchanges in Russia or China, leading law enforcement into a digital dead end.
How does your company track these flows if they are so difficult to stop?
We have moved from passive observation to active intelligence. We operate like an intelligence unit to map networks and have clustered over one billion wallet addresses. This allows geolocation analysis and prediction of regional links such as Latin America, China, or other regions.
Why do identity checks at major crypto exchanges fail?
Know-Your-Customer checks are often purely cosmetic. We have documented cases in which individuals with links to Hezbollah moved millions despite active arrest warrants. In the unregulated market of shadow exchanges, users can enter fictional names and immediately exchange crypto for Visa card balances. It is frighteningly seamless.
How are Islamist groups integrated into the crypto world?
We are witnessing the digitization of the hawala system - the traditional trust-based remittance network. In the Gaza Strip alone, over 400 wallets have been identified to instantly settle balances between hawala brokers in countries such as Turkey and the United Arab Emirates using crypto.
Which countries are most effective at combating these flows?
Israel and Germany are leading the way. Israel focuses on terrorist financing, while Germany dismantlesthe server infrastructure of illegal exchanges. The United Kingdom could act more proactively. Chinaremains a high-risk location due to the immense volume of legitimate transactions enabling large-scale laundering.
Do you believe these illegal flows can ever be completely stopped?
It is a constant cat-and-mouse game. Criminals will always find new ways, but that does not mean we
should stop trying. Even if we cannot stop everything, we must cut off the lifeline of criminals and terrorists.
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