Hundreds of lightly regulated crypto card issuers let criminals and sanctions evaders spend dirty money worldwide, and verifiable digital IDs could close the loophole.

Crypto crime is a booming business. North Korean hackers just stole $6.3 billion from the cryptocurrency exchange Binance, making it the largest heist in history. As crypto-based payment options multiply, criminals, terror groups, and dictators are getting potent new tools to launder funds, dodge US sanctions, and profit from illegal activity. The latest trend in moving dirty money is crypto-linked credit cards, with little-known companies offering Visa- and Mastercard-branded credit and debit cards around the world. Fortunately, modern digital identity tools could provide a way to fight back.

How Crypto Cards Help Criminals Evade Sanctions

Crypto cards provide an easy pathway for entities in Russia and Iran to evade sanctions or for criminals to launder cash. In October 2025, Canadian authorities fined Xeltox, a Russian financial company that issues Visa- and Mastercard-branded crypto cards under the name Cryptomus, 177 million Canadian dollars ($126 million) for 2,593 separate violations of the “Proceeds of Crime (Money Laundering) and Terrorist Financing Act.” Last month, the United Kingdom sanctioned Xeltox and Cryptomus for helping others evade sanctions. While it is not clear if or how the Cryptomus crypto cards were used by illicit actors, Xeltox has been connected to billions in transactions related to terror finance, child sexual abuse material, human trafficking, and Iranian sanctions violations. Chinese actors, meanwhile, are using the crypto cards to circumvent US restrictions and gain access to cutting-edge artificial intelligence (AI) models. 

Roughly 250 companies, big and small, now issue crypto cards—many with no real identity checks or anti-money-laundering controls. According to recent reporting from The Economist, roughly 70 percent of the card issuers had weak or no requirements for “know-your-customer” (KYC) identity verification. Some issuers even advertise “no-KYC cards.” Criminals and sanctions evaders can take advantage of these weak requirements to disguise themselves or their location. 

Researchers for The Economist applied for a card from an online Russian-language service provider named CinCin that advertised “no documents, no waiting and no long forms” and had a new card linked to their phone almost immediately. In another instance, a person using a Chinese ID and a computer with a Chinese IP address was able to get a crypto-linked card by simply inputting a non-Chinese home address. The cardholder then used the account to pay thousands of dollars for ChatGPT subscriptions. 

Visa and Mastercard note that they follow the law and require that their partners do the same. But the law doesn’t requirethat US financial companies monitor the KYC standards of card issuers under their brand, nor is it even clear that Visa or Mastercard are well-placed to do that.

How Digital IDs Could Close the Dirty Money Loophole

Identity verification doesn’t need to be a weak spot in our financial system. While 21^st-century money is now moving at the speed of light, the 20^th-century technology banks use to verify identity is decades out of date. There is no excuse for relying on paper and plastic IDs—or, worse, letting customers simply type in a name and address to open an account or get a credit card. Criminals have gone high-tech, while law enforcement is still chasing them on horseback.

Better identity solutions exist.

Modern digital ID technology uses what’s known as “verifiable digital credentials” to offer a reliable, global standard that can prove who a customer is and where they live, letting law-abiding customers in and keeping criminals and their dirty money out. Instead of trusting a shady card issuer to check identity, that step would happen up front, through certified and trusted digital ID providers. 

This isn’t science fiction—digital IDs are already commonly used for TSA security, and several US states are adopting mobile driver’s licenses and similar forms of digital IDs to replace physical licenses. In Singapore, 97 percent of the citizens have a digital ID, using it for everything from government services to everyday transactions. 

Digital IDs are far more secure than a traditional driver’s license. Because they are linked to a single person by binding them to the individual’s biometric information—just like your phone only opens with your face or fingerprint—the IDs are much harder to fake or steal. Perhaps surprisingly, digital IDs also have the potential to substantially increase privacy.A digital ID can prove you are who you say you are without handing over your home address, birth date, or anything else the other side doesn’t need to see.

Fixing the dirty money loopholes isn’t impossible, but both industry and government need to do their part. Banks and card companies issuing accounts should not be able to simply rely on self-reported names and addresses. Imposing a requirement that customers provide verified digital IDs before opening an account that links to the US financial system could help solve the problem. For that to happen, Washington must act—modernizing America’s banking law for the digital era. 

Criminals have gone high-tech while America’s banking rules are trapped in an era of paper, plastic, and unverified self-reporting. It’s time for our financial system to catch up.

About the Authors: Josh Birenbaum and Aidan Christman

Josh Birenbaum is the founder of Trusted Terrain Strategies, a consultancy that focuses on illicit finance, emerging technology, trusted trade, and geopolitical risk. Josh obtained his JD from the University of Virginia and his BA from Bard College.

Aidan Christman is an intern at the Center on Economic and Financial Power at the Foundation for Defense of Democracies.

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