LIBERIA: Cryptocurrency and Financial Crime on the Rise, Experts Warn

As Liberia continues to grapple with the challenges of financial inclusion, experts are sounding the alarm over the growing threat of cryptocurrency-related financial crime. A new report from Elliptic, a leading provider of cryptoasset risk management solutions, reveals that criminal activity in the country is evolving at an alarming rate.

Criminal Activity on the Rise

The report highlights several key trends:

• Privacy wallets: Criminals in Liberia are increasingly using privacy wallets to conceal their activities, making it more difficult for authorities to track and prevent financial crimes.
• Darknet markets: Darknet markets have emerged as a major source of illicit cryptoasset transfers, with criminals exploiting these platforms to launder money and evade detection.
• Sanctioned actors: Sanctioned actors in Liberia are using increasingly complex methods to circumvent sanctions and move funds through the cryptoasset ecosystem.

Decentralized Finance (DeFi) Concerns

The report also notes that DeFi has become an area of concern, as criminals exploit vulnerabilities in these systems to launder money and engage in other illicit activities.

Regulation Driving Criminal Activity

Furthermore, the report highlights that regulation is driving criminals off of compliant exchange platforms and onto unregulated services that do not require Know Your Customer (KYC) verification. This shift towards unregulated services is making it more challenging for authorities to track and prevent financial crimes.

Expert Warning

Elliptic’s experts warn that the growing threat of cryptocurrency-related financial crime in Liberia poses a significant risk to the country’s financial stability and security. “Criminal activity in the cryptoasset ecosystem is constantly evolving, and it is essential that authorities and regulatory bodies stay ahead of these threats,” said an Elliptic spokesperson.

Collaboration Needed

The report concludes by emphasizing the need for greater collaboration between authorities, regulators, and industry stakeholders to prevent financial crime in Liberia’s cryptoasset ecosystem. By sharing insights on cryptoasset typologies and red flags, experts hope to provide a valuable resource to the wider industry as it continues to build a safer community for legitimate cryptocurrency users.

Government Response

In response to the report, Liberian authorities have announced plans to increase their efforts to track and prevent financial crimes in the country’s cryptoasset ecosystem. “We take these threats seriously and are committed to working with Elliptic and other stakeholders to protect Liberia’s financial system from criminal activity,” said a government spokesperson.