Crypto-Enabled Cards Fuel Illicit Purchases of US AI Models
· Technology · Hindustan Times, The Economist
Venture capitalists poured $10bn into crypto startups in the first half of the year, while a separate surge in crypto-enabled credit and debit cards facilitates transactions for users in countries with unstable currencies. However, these cards also allow buyers in China to purchase subscriptions to American frontier AI models, bypassing model-builders' sales restrictions. Many card providers fail to verify cardholder identities, leaving them vulnerable to abuse by criminals and sanctions evaders. Stablecoin cards were used in transactions exceeding $1.1bn in August, triple the volume from a year earlier, according to data provider Paymentscan. Regulators in America, Europe, and Hong Kong encouraged this growth by establishing clearer rules for digital currencies, while payment networks like Visa and Mastercard offered network membership to startup card-issuers.
Why it matters
The lack of identity verification on crypto-enabled cards allows buyers in restricted regions to acquire American frontier AI technology, undermining export controls and sanctions.
Read the original report — Hindustan Times
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