The World Gold Council has revealed a staggering statistic about illicit gold flows, estimating they surpass $120 billion annually. This amount closely parallels the entire economic output of Morocco, underlining the scale of the issue.
A major contributor to this problem is artisanal and small-scale gold mining, commonly referred to as ASGM. This sector produces about 20% of the global gold supply, employing between 15 and 20 million individuals worldwide.
#Where Does This Gold End Up?
The gold extracted by small-scale miners, especially in conflict-prone regions like Sudan and Mali, often passes through various intermediaries before reaching major trading hubs. Notably, the United Arab Emirates plays a pivotal role as a significant waypoint in these routes. After navigating these channels, the gold's origin is frequently obscured enough to avoid rigorous scrutiny at refineries.
This unchecked activity fuels dangerous entities—organized crime, armed groups, and those financing terrorism take advantage of the lack of transparency in ASGM supply chains.
In November 2024, the World Gold Council initiated discussions about these alarming trends through a report titled “Silence Is Golden,” allied with former UK Deputy Prime Minister Dominic Raab. The report addressed rampant exploitation within ASGM networks and advocated for urgent international action.
In response to these crises, a Global Coalition for Action on ASGM was established in November 2025, and Brazil initiated its own program, the Brazilian Forum for Responsible Gold, in September 2025.
#What Should Crypto Investors Consider?
The World Gold Council has also been innovating in the digital space, unveiling initiatives such as Gold247 and a platform called “Gold as a Service” in March 2026. Tokenized gold is emerging as a prominent market within cryptocurrency, enabling products like Paxos Gold (PAXG) and Tether Gold (XAUT) for investors to hold digital claims on physical gold stored securely.
#Implications for Investors
The presence of illicit gold in a substantial portion of global supplies could lead compliance-focused institutional investors to require proof of origin before making purchases. This situation might result in a two-tier market that distinguishes between certified clean gold and other variants.
As the push for formalization strengthens, small-scale mining operations may face increased production costs. Bringing these miners into legitimate supply chains could elevate prices for buyers.
Additionally, purchasing gold linked to conflict zones poses national security risks, prompting regulatory scrutiny. The emergence of international coalitions and dedicated forums hints at impending regulations. However, if varying sourcing standards arise across different jurisdictions, the opportunities for smugglers may simply adapt rather than disappear.