Over $4 Billion Laundered Through Crypto Scams in Paraguay

Authorities in Paraguay have raised serious concerns after uncovering that over $4 billion flowed through cryptocurrency scams and Ponzi schemes between 2023 and 2024.

A Surge in Fraud Amid Crypto Hype

The head of the National Polices cybercrime unit, Diosnel Alarcon, revealed that these scams gained traction by leveraging social media platforms and unregulated exchanges to attract unsuspecting investors.

Many of the victims were lured by promises of high returns and fast profits, often receiving small initial payments to create a false sense of legitimacy.

“These platforms create a front of legitimacy by simulating profits early on. Victims wait months before realizing theyve lost everything,” Alarcon said.

Paraguay as a Transit Hub for Global Crypto Crime

Whats especially concerning is that many of these platforms were not necessarily based in Paraguay. Instead, they used Paraguayan bank accounts and digital infrastructure to move funds across borders.

Alarcon emphasized that Paraguays relatively loose oversight in crypto and fintech sectors made it an attractive channel for criminal activity.

Challenges in Tracing and Recovery

While blockchain transactions are technically traceable, Alarcon noted that recovering stolen assets remains extremely difficult.

“This isn‘t a technical issue—it’s a legal and bureaucratic one,” he said. “We are dealing with cross-border layers of compliance, and limited cooperation from foreign jurisdictions.”

International legal assistance remains slow and complex, often allowing scammers time to move assets through multiple wallets or convert them to fiat money.

A Call for Awareness

The situation in Paraguay underscores the urgent need for greater public awareness and timely reporting of crypto-related fraud. Early detection can make a crucial difference in stopping criminal activity and potentially recovering stolen funds before they leave the local system. Meanwhile, educating users—especially in emerging markets—about the basics of cryptocurrency and common scam tactics is essential in curbing victimization.