Crypto Currencies and Criminal Customers: Taming the Crypto Wild West

Understanding Financial Crime Risks

Forensic & Litigation Consulting | Financial Institutions

November 26, 2018

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As someone who spends most of his life helping banks in the fight against financial crime, I always enjoy stories of hapless criminals caught in the act trying to get money into the system. There was the man who arrived at a building society with a bag of £50 notes and exclaimed “I’m definitely not a drug dealer!” when questioned by staff. Then there was the gentleman who visited his safe deposit box in the city twenty times a day, whisking in and out on his motorbike to dispense with his illicit wares.

These crooks were, to put it kindly, unsophisticated. Or to put it bluntly, they were idiots. For every Vito Corleone there will be a hundred Del Boys. The real challenge for law enforcement, regulators and compliance professionals will always be the smart crooks, particularly those using new technologies and tools to disguise their behaviour.

Depending on your opinion, virtual currencies represent either the vanguard of a utopian future, or the latest speculative bubble just waiting to burst. Despite uncertainty about the future of virtual currencies, criminals have been quick to seize new technology, and benefit from the perceived anonymity, speed of transactions and ease of access to international markets.

So what do crooks get from virtual currency that they don’t get from banks?

Let’s take a worked example. I’m a politician in a country with a high degree of corruption and I’ve been plundering the public purse. I want to buy a property offshore as an investment to house my collection of Bentleys, Kalashnikovs and football clubs.


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