Financial Crime World

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Fraudulent Transactions in Finance Exposed in British Indian Ocean Territory

A human rights organization has filed a complaint against two companies operating in the British Indian Ocean Territory (BIOT), alleging that they have been facilitating fraudulent transactions worth tens of billions of dollars daily.

Background

The Chagos Refugees Group United Kingdom, supported by the Crypto Currency Resolution Trust (Bahamas), accused Afilias Ltd. and its subsidiaries, 101 Domains GRS Limited and Internet Computer Bureau Limited, of breaching OECD Guidelines on due diligence, human rights, and consumer interests.

Allegations

According to the complaint, the companies have been complicit in allowing cryptocurrency-based criminal operations, including:

  • Ponzi schemes
  • Money laundering fronts
  • Gambling
  • Fraudulent Initial Coin Offerings (ICOs)

to flourish in the BIOT. The territory’s lack of a Financial Crimes Unit and relevant laws has made it difficult for authorities to apprehend or prosecute criminals involved.

Demands

The Chagos islanders, who were forcibly deported from the archipelago by Britain, are seeking:

  • Restitution
  • Return of the .IO domain code, which is used to facilitate these fraudulent transactions
  • Acknowledgment of Afilias Ltd.’s complicity in human rights abuses

Investigation and Outcome

In a rare move, the Irish National Contact Point (NCP) accepted the complaint for further consideration in March 2023. However, all parties declined the NCP’s offer of mediation, leading to the NCP publishing its final statement in September 2023.

The NCP recommended that companies dealing with consumers should:

  • Have an appropriate non-judicial dispute resolution and redress mechanism
  • Actively engage with public authorities to prevent deceptive marketing practices
  • Take steps to reduce e-commerce risks
  • Conduct human rights due diligence
  • Have a human rights policy in place

Unfortunately, the parties failed to reach an agreement.

Conclusion

The outcome of the complaint was ultimately unsuccessful. However, the case has brought attention to the scale of fraudulent transactions taking place in the BIOT and highlights the need for greater transparency and accountability in the financial sector.