Financial Crime World

Title: Australian Criminal Underworld Embraces Bitcoin: A Look into the Role of Cryptocurrencies in Australia’s Dark Side

In a groundbreaking study published in the Monash University Law Review, researchers Dr. Aaron Lane and Dr. Lisanne Adam shed light on the nefarious side of Bitcoin and other cryptocurrencies in Australia. The empirical analysis, which covers court records from 2009 to 2020, offers a comprehensive view of the world of crypto-related crimes in the country since the rise of Bitcoin.

Key Findings: Cryptocurrencies as a Preferred Tool for Criminal Activities

The study reveals a significant increase in crypto-related cases before Australian courts since 2018. From the 103 cases analyzed, approximately half (46) occurred in 2020. In examining the criminal cases, several trends emerged:

  1. ** payment method or money laundering ** in drug-related offenses, with over 80% of the criminal activity in the dataset attributed to drug-related crimes.
  2. ** Bitcoin’s dominance ** as the preferred cryptocurrency for illicit activities in the investigated dataset. More than 90% of the decisions referenced “Bitcoin,” with only two exceptions in 2019 involving Ethereum and Litecoin.

Aggravating Factor in Sentencing Decisions

According to Ari Redbord, TRM’s Head of Legal and Government Affairs and former US prosecutor, the use of cryptocurrencies in illegal activities can be taken as an _aggravating factor _ in sentencing decisions. Redbord explains that obfuscation techniques, such as encryption or scrambling during the commission of a crime, are considered obstruction of justice in US federal sentencing guidelines. However, the use of cryptocurrencies itself is not explicitly mentioned as an aggravating factor in the guidelines.

Traditional Policing Methods vs. Blockchain Analytics

The study underscores that most criminal activities were discovered using traditional policing methods, such as intercepting packages, telephone conversations, physical surveillance, search warrants, and interrogations. However, in some cases, undercover work on darknet markets led to successful arrests by the Victorian and Western Australian police forces. The study’s authors suggest that this could be a reflection of the primitive nature of the offenses and the offenders’ cooperation with law enforcement in numerous cases.

What’s Next: A Brighter Future for Crypto Crime Investigation

The study provides a historical perspective, but the Australian regulatory and enforcement landscape for cryptocurrency-related crimes has undergone significant changes, including:

  1. ** Increased Regulatory Focus on Cryptocurrencies **: The Australian Transaction Reports and Analysis Centre (AUSTRAC) has urged Australian digital currency exchanges to guard against crypto-based financial crimes since 2018.
  2. ** Crypto-related Scams and Fraud **: In the first half of 2022, Australians reported a staggering AUD 221 million (USD 145 million) lost to crypto-related scams, a 162% increase from 2021.
  3. ** Enhanced Cryptocurrency Policing Capabilities **: Australian law enforcement is expanding its capacities to tackle crypto-related crimes, with dedicated units and expanded powers.
  4. ** Increased International Cooperation **: Given the cross-border nature of crypto crimes, international collaboration between law enforcement agencies has become crucial to disrupting criminal activities.

As the crypto landscape evolves, researchers and law enforcement agencies are keeping a watchful eye on trends to better understand and address the challenges and opportunities posed by cryptocurrencies. Future studies are expected to provide a more comprehensive picture of the role of cryptocurrencies in crime in Australia.