Code is Grey: Infrastructural Illegality in DeFi, NFTs, and the Metaverse

Abstract

Abstract The same infrastructures that enable decentralised finance, NFT markets, and metaverse platforms also create new spaces for para‑crime. This article extends grey criminology to Web3 by applying three mechanisms of infrastructural illegality – parasitism, normative greyness, and platform co‑production – first developed for physical cross‑border grey economies (daigou). Drawing on technical and financial crime literature, we show how smart contracts, stablecoins, and DAO governance are parasitised for money laundering and fraud; how techno‑libertarian narratives of 'code is law' and decentralisation sustain normative greyness; and how algorithmic security and DAO co‑production reshape rather than eliminate para‑crime. The analysis reveals both structural parallels with physical grey economies and domain‑specific variations – most notably, the deeper internalisation of co‑production in code‑based systems. We argue that grey criminology must extend its infrastructural turn to virtual and metaversal spaces, and that enforcement paradoxes – where suppression threatens valued infrastructures – apply as much to blockchain protocols as to customs thresholds.