Criminal use of crypto is an ’emerging threat’ – Australian police

Australia’s federal law enforcement agency has highlighted the criminal use of cryptocurrency as an “emerging threat” in the country, but says keeping up with criminals is an ongoing challenge.

A spokesperson for the Australian Federal Police (AFP) told Cointelegraph that there has been an “increase in the number of criminals using cryptocurrencies to facilitate illegal activities and attempt to hide the ownership of assets,” noting:

“The criminal use of cryptocurrency is a growing threat to law enforcement.”

However, they admitted that the biggest challenge for law enforcement is to “continually evolve” their “tools, techniques and legal framework” to keep up with criminals, especially as mainstream adoption of cryptocurrency increases.

Last month, the AFP established a new cryptocurrency unit focused on monitoring crypto-related transactions.

However, the spokesman said that despite the earlier establishment of crypto-focused units, “criminals continue to find opportunities to evade law enforcement and exploit the public.”

Misplaced focus?

An Australian private investigator believes the AFP has yet to focus on the “prolific and profitable” crypto crime – online investment scams.

IFW Global Executive Chairman Ken Gamble told Cointelegraph that most of the AFP’s recent focus has been on crypto-money laundering related to drug trafficking, cyber intrusions, ransomware, email compromise and hacking, but not “large-scale online investment scams.”

Scamwatch data between January and July this year found Australians had lost A$242.5 million ($152.6 million) to scammers already in 2022, with the majority of funds lost to investment scams, including romance scams, classic Ponzi schemes and cryptocurrency scams.

The figure is already 36% higher than for the whole of 2021.

The investigator also believes that some law enforcement departments are still not fully equipped to handle crypto-crime cases, adding that “law enforcement agencies need better training and education on how cryptocurrency works.”

A July report by research firm Chainalysis found that 74% of government agencies felt underequipped to investigate cryptocurrency-related crime, with respondents indicating that many agencies did not use specialized blockchain analysis tools.

“There is a lack of professional and certified cryptocurrency trackers that quickly involve the criminal industry,” Gamble said.

Related: Hands up! Interpol storms into the metaverse

This could soon change, with a number of international and national authorities announcing the creation of crypto-crime-focused units this year.

Meanwhile, Interpol (International Criminal Police Organization) has recently set up a special team in Singapore to help the government fight crimes involving virtual assets.

Interpol Secretary Jürgen Stock spoke at the Interpol General Assembly in India about the need for further training in crypto for law enforcement, saying cryptocurrency “posed a challenge” as agencies “are not properly trained and well equipped from the beginning”.