Financial Crime World

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COOK ISLANDS: Blockchain Bill Sparks Global Concerns Over Anti-Money Laundering Measures

A proposed legislation in the Cook Islands has raised alarm bells globally, with experts warning that it could validate hacking into any account or system worldwide.

The Proposed Legislation

The Tainted Cryptocurrency Recovery Bill 2023, drafted by a US-based company, Drumcliffe, allows for “recovery agents” to use various means, including hacking, to investigate and seize cryptocurrency suspected of being linked to illegal activities.

Government Concerns

Cook Islands’ Crown Law has slammed the bill, calling it “flawed” and “clearly unconstitutional.” Deputy Solicitor General David Greig said:

The legislation essentially validates carrying out criminal activities in any part of the world, which could be considered terrorism in some countries. Given its potential use to hack into accounts in New Zealand, it could affect the Cook Islands’ constitutional relationship with this country.

Expert Concerns

Experts have also expressed concerns over the bill’s far-reaching implications:

  • Giving the green light for illegal entry into systems around the world
  • Allowing for the installation of spyware without consent
  • “I see this as maybe right out of a spy film type of thing,” said AUT senior lecturer Jeff Nijsse

Financial Services Concerns

The bill has also raised questions about the potential impact on the Cook Islands’ financial services industry:

  • Cook Islands Finance, the government agency established to promote and develop the country’s financial services industry, warned that the bill could harm the industry, which currently provides the government with millions in fees and taxes.

Drumcliffe’s Motives

Drumcliffe, the US-based company behind the bill, claims it is a Cook Islands Government initiative aimed at fighting international crime. However, experts are skeptical about its motives:

It would not look good for the Cook Islands Government, either domestically or on the international stage, if the Cook Islands was seen to be influenced and controlled by foreign private sector interests who seek significant financial benefit from Cook Islands laws.

Prime Minister’s Defense

Cook Islands Prime Minister Mark Brown has defended the bill, saying it is intended to help in the fight against international cybercrime. However, experts remain unconvinced:

Seizing supposedly tainted cryptocurrency is not an easy task and may have little financial gain for the country.

Conclusion

The controversy surrounding the Tainted Cryptocurrency Recovery Bill 2023 highlights the need for careful consideration of anti-money laundering measures and their potential impact on global security and finance.