Crypto wallets: a new weapon for crooks

Taking part in online gambling usually requires registration, identity verification, and sometimes even limits set by the operator itself to combat addiction. This system, though imperfect, offered a minimum of control. Today, this fragile balance is being upset by a well-known technology: the crypto wallet.

With just a few clicks, it is now possible to access online casinos via a decentralised crypto wallet, without ever having to provide your name, age or location. No identification, no verification, no restrictions. Just connect your wallet and play. The result is a world without laws or regulations, where the promise of quick profits conceals a much darker reality.

‘It’s tragic!’ says Massimo Menegalli, director of Golden Palace and a committed player in the legal gambling sector.

A total absence of a legal framework

Gaming platforms that rely solely on cryptos have no regulatory obligations. They evade national and European standards, operate outside known jurisdictions, and use anonymity as a marketing argument.

They have no official licence, do not respect any responsible gambling rules and do not apply any filters to protect minors or people banned from gambling. Some operators take advantage of this legal loophole to attract a vulnerable clientele, often young and looking for thrills.

‘They target the youngest. The most vulnerable. Those we are supposed to protect. And they don’t care’, Menegalli denounced in a LinkedIn post.

Major risks for players… and for society as a whole

The absence of identity verification raises another alarm: that of money laundering and tax fraud. With the anonymity guaranteed by decentralised wallets, it becomes almost impossible to trace financial flows. Criminal groups could take advantage of this to pass dubious funds through without being bothered.

At the same time, ordinary users have no recourse in the event of a dispute, no customer support, no tracking of losses, and no possibility of self-exclusion, which is mandatory in legal structures.

Legal operators sound the alarm

Authorised operators, such as Golden Palace Casino & Sports, highlight the checks they are required to carry out:

• Identity verification (KYC)
• Age verification
• Monitoring excessive gambling
• Measures against money laundering

Unequal treatment creates unfair competition and drives some players to flee to these ‘phantom’ platforms, attracted by simplicity and anonymity, to the detriment of their security.

So what is being done? Why so much inaction?

The crucial question remains: what are we waiting for to intervene? Despite the warning signs, there is still no specific regulation governing the use of cryptocurrencies in online gambling at European level. National jurisdictions are trying as best they can to adapt laws that are already obsolete in the face of the agility of blockchain technologies.

The technical and legal complexity of these new players makes them difficult to regulate. Many operate from territories where extraterritoriality makes prosecution virtually impossible.

Yet, according to Menegalli, doing nothing means allowing abuses to define the norm.

‘But what are we waiting for to intervene? Before the abuses regulate us.’

The call for common governance

European harmonisation is essential, coupled with international cooperation to monitor crypto flows, impose KYC obligations on platforms, and restrict access to these underground casinos. Initiatives such as the MiCA (Markets in Crypto-Assets) regulation are a step in this direction, but it will take some time for them to come into force.

In the meantime, responsibility also lies with users, who are often ill-informed. A massive awareness campaign is needed to warn of the dangers of these platforms, which are often wrongly perceived as more modern, cooler or more ethical because they are linked to cryptos.

While technologies are advancing at breakneck speed, regulatory systems are struggling to keep up. The point here is not to reject innovation, but to give it a framework. The future of online gaming will depend on our ability to create an ecosystem that is fair, transparent and protective for all.

Crypto is not the problem in itself, but its use without a framework is.