back to listing

Criminals using cryptocurrency to launder fraud money

Member: Nifa

The emergence of cryptocurrencies such as Bitcoin is beginning to change the face of finance all over the world, but concerns have been raised that the “semi-autonomous and decentralised” nature of these currencies is also attracting the attention of criminals and fraudsters.

Earlier this week, Police in Australia arrested a 32-year-old man and a 29-year-old woman suspected of using cryptocurrencies to help launder money accumulated via an elaborate credit card fraud.

Police in New South Wales seized laptops, mobile phones, external hard drives and more after carrying out a search at the anonymous couple’s home.

This search, which followed complex investigations led by the region’s Cybercrime Squad, helped to unravel a web of fraudulently obtained credit card numbers, shady companies and offshore cryptocurrency accounts.

According to reports, Police uncovered as many as 45 companies that had been used as part of the alleged fraud scheme. Officials also discovered that more than $300,000 AUD (£166,000) had been ‘shifted’ to digital currencies such as Bitcoin and “distributed into cryptocurrency accounts offshore” in the criminals’ efforts to hide their tracks.

The news comes at a time when Australia has been increasingly concerned about trying to close the “regulatory gap” between money laundering and the exchange of digital currencies, after establishing a Governmental body known as AUSTRAC to keep a close eye on financial transactions and crime. More recently, Australia has introduced new anti-money laundering rules, which took effect in April this year.

A detective who worked on the case pointed out that AUSTRAC had increased opportunities to facilitate the sharing of financial intelligence relating to the use of cryptocurrencies across various departments. He added that the sharing of such information was vital in helping to minimise the risk of criminal groups taking advantage of new technology to aid illicit activities.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “The growing popularity and consequent ubiquity of cryptocurrencies is creating new challenges for financial regulators and law enforcement agencies alike.

“In this particular case, it is interesting to see the Australian Police taking action seizing multiple computers in an attempt to trace cryptocurrency wallets.”

Author: Roger Isaacs 2 October 2018

Share on Twitter