COOK ISLANDS: Critics Slam Proposed Tainted Cryptocurrency Recovery Bill as Threat to Human Rights

A proposed law aimed at targeting tainted cryptocurrency in the Cook Islands has sparked intense scrutiny, with a local expert warning that it undermines human rights and fails to address the real channels of money laundering.

Lack of Transparency and Consultation

The 2023 Tainted Cryptocurrency Recovery Bill was tabled in Parliament last December and referred to a special select committee for review. However, Ano Tisam, a renowned Cook Islands cryptocurrency expert, has expressed serious concerns about the lack of consultation with the Crown Law Office during the drafting process.

• Tisam claims that the process was not inclusive or transparent.
• The Cook Islands lawyers hired by U.S.-based high-value debt collector Drumcliffe to draft the bill deny any wrongdoing.

Implications for Individual Rights and Human Dignity

Tisam argues that the proposed law has significant implications for individual rights and human dignity, citing concerns over the potential freezing of assets without due process.

• “It’s terrible,” he says. “They say it’s good for the people, but there’s nothing good for the people in that it tramples on people’s human rights – ‘innocent before proven guilty’.”
• The expert is concerned about the lack of safeguards to protect individual privacy and due process.

Effectiveness in Combating Money Laundering and Terrorism Financing

Tisam questions the bill’s effectiveness in combating money laundering and terrorism financing, pointing out that most local retail crypto investors operate on public blockchains such as Bitcoin and Ethereum.

• Instead, he believes that the focus should shift to addressing the “opaque” operations of banks.
• Tisam advocates for promoting cryptocurrency, a rapidly growing industry with enormous potential for economic growth.

Need for Expert Advice

Tisam emphasizes the need for expert advice during the legislative process to ensure that decisions made have a positive impact on Cook Islands’ future prospects in the cryptocurrency industry.

• The proposed bill includes measures aimed at establishing a Cryptocurrency Restitution Tribunal and judicial review provisions, but Tisam remains skeptical about their effectiveness in practice.
• He stresses the importance of balancing human rights concerns with legitimate concerns about money laundering and terrorism financing.

Uncertain Outcome

The Parliament Select Committee has sat for six hearing sessions, receiving 16 submissions from various stakeholders and experts. The outcome of the review remains uncertain, with critics calling for a more balanced approach that prioritizes human rights while addressing legitimate concerns about money laundering and terrorism financing.

• Will the proposed bill be revised to better protect individual rights and human dignity? Only time will tell.