$4B Laundered in Paraguay—Crypto Scams Explode

Paraguay is in the middle of a crypto fraud crisis. Authorities have revealed that over $4 billion was moved through cryptocurrency scams and Ponzi schemes in 2023 and 2024—most of it through fake investment platforms and shady middlemen.

Diosnel Alarcón, head of the National Police’s cybercrime unit, shared the numbers in an interview. He explained how these scams are booming in communities where people want to invest—but often don’t understand how crypto works.

“These aren’t tech-savvy schemes,” Alarcón said. “They’re fueled by personal trust—middlemen who convince friends, family and communities to buy into the dream of fast, easy money.”

How the Scams Work: The Role of Middlemen and Fake Platforms

At the heart of the fraud are intermediaries—often locals—who promote fake platforms that promise high returns. They might even pay out small initial profits to build trust. But once larger sums are invested, the money disappears—never to be seen again.

What makes these scams so hard to tackle is that many aren’t even based in Paraguay. Fraudsters use foreign platforms and local accounts to move money through the country, making it a transit point in a much larger web of deceit.

Although all crypto transactions are recorded on the blockchain, tracing the actual people behind them isn’t always easy. “The tech isn’t the problem,” Alarcón said. “It’s the international red tape that slows us down.”

Fighting Back: Traceability Isn’t Enough Without Speed

The good news is that crypto transactions leave a digital trail. The bad news is that time is of the essence. Once scammers move funds through multiple wallets or convert them into fiat, it’s much harder to track and recover.

That’s why Alarcón is urging the public to report suspicious activity immediately. “If we get ahead of the money, we can stop it from leaving the country—and even get some of it back,” he said.

What You Need to Know:

• Over $4 billion was moved through crypto scams in Paraguay in 2 years.

• Middlemen and fake investment platforms are the backbone of these operations.

• Many are international, so enforcement is slow and complicated.

• Act fast—early reporting can prevent irreparable losses

Bottom Line:

Paraguay’s crypto scam epidemic is a harsh reminder that even in the digital age, trust can be weaponized. By staying alert and reporting shady schemes early, authorities and citizens alike can play a part in cracking down on this growing threat.