Global experts advance joint fight against crypto-enabled crime

Participants at the event in Vienna – jointly organised by Europol, UNODC and the Basel Institute on Governance – gained fresh insights into the evolving ways that crypto assets and blockchain technology are being misused for crime.

The conference, which was held on 28-29 October, brought together more than 250 in-person participants and upwards of 1 000 online attendees from a wide range of fields, including law enforcement, prosecutors, regulators, researchers and leading blockchain intelligence firms.

The growing sophistication of criminal tactics poses risks, not only to the crypto sector and to scam victims, but also to society at large. These risks include serious crimes (eg drug trafficking, terrorism financing and sanctions evasion).

Burkhard Mühl, head of Europol’s European Financial and Economic Crime Centre, stated: “The misuse of crypto and blockchain technology for criminal purposes is becoming increasingly sophisticated, complex and organised. Investigating these crimes places a significant burden on the law enforcement agencies of European Union Member States. Europol will therefore continue to invest in innovation, technology and co-operation with private partners in order to fulfil its mandate of supporting Member States when it comes to complex and international investigations.”

Professionalising the response

Law enforcement, private sector partners and academia are rapidly advancing their ability to counter the threats posed by sophisticated crypto-related crimes and money laundering. Advanced tools are reducing the reliance on manual tracing, while a host of successful cross-border operations highlight the power of collaboration.

Research and reliable data on crypto’s use for criminal purposes are also crucial for Governments to assess risks and respond appropriately.

John Brandolino, UNODC director for the Division of Treaty Affairs, gave one example referencing a panel on transnational scams, illicit marketplaces and money laundering networks. “Our research into scam centres in South East Asia,” asserted Brandolino, “is giving Governments and law enforcement the insights they need to disrupt these fast-growing transnational threats.”

However, gaps remain when it comes to legislation, implementation and capacity. Addressing them will require, for the most part, harmonised and evidence-based standards for blockchain investigations and intelligence (the topic, in fact, of one of this year’s breakout sessions).

Co-operation across borders 

The borderless nature of blockchains means that criminal proceeds can cross the globe in seconds, while formal co-operation between the authorities can still take days or weeks. Faster inter-agency channels are vital, stated conference participants, in tandem with closer co-ordination between investigators and prosecutors.

Public-private sector partnerships have been critical for disrupting illicit activity on blockchain, but they must be enhanced and scaled. This was a key theme on the first day of conference, which was dedicated to cross-sector collaboration.

One side event led by The Wolfsberg Group served to highlight the importance of private-to-private co-operation. Ned Conway, executive secretary of The Wolfsberg Group, observed: “As traditional and decentralised finance merge, clearer channels for information-sharing between banks and virtual asset service providers will greatly strengthen efforts to detect and disrupt illicit finance.”

Building capacity 

Crypto is now a common feature of financial crime investigations, yet many agencies still lack the skills and resources necessary to pursue leads or recover assets. Developing specialist teams and upskilling front line officers is essential.

Elizabeth Andersen, executive director of the Basel Institute on Governance, stated: “There’s a huge opportunity here. Through hands-on training and peer learning, countries can build the capacity to detect and trace crypto assets linked to crime and recover them for the benefit of victims and wider society.”

As crypto use expands and evolves, the joint Global Conference remains a unique platform for dialogue and practical co-operation. By developing clear standards, enhancing co-operation and building capacity, there’s the opportunity to collectively ensure financial innovations are harnessed for the public good, while at the same time preventing their abuse by criminals.