International Law Enforcement Conference Addresses Crypto and the ‘Criminal Economy’

The 2019 National Proceeds of Crime Conference (NPOCC) held in Brisbane, Australia from November 13-15 addressed "Globalisation and Digitisation of the Criminal Economy," and featured 200+ delegates hearing from representatives of organizations such as the Australian Federal Police, Singapore and New Zealand police, United States Department of Justice, and the Australian Criminal Intelligence Commission. The conference set out to address how to better seize criminal profits and face challenges to law enforcement presented by the darknet and cryptocurrencies like bitcoin.

Addressing Crypto Crime
Justine Gough, Acting Assistant Commissioner for the Australian Federal Police (AFP), stated that "Advances in technology, like cryptocurrency and encrypted communications have changed the way criminals acquire and hide their assets" and that "Seizing and removing the profits of crime is one of the most effective capabilities we have in impacting organised criminal networks."

The international conference, which aimed to address such topics as "the Darknet, trends in money laundering, collaboration in investigations; evidence collection in an age of cloud-based data and the monetisation of cybercrime" focused on how relevant organizations respond to crime in an age where cryptography and digital assets like bitcoin have enabled greater efficiency in skirting law enforcement. The push echoes recent sentiment from the U.S. Federal Bureau of Investigation (FBI) whose director Christopher Wray claimed problems presented by such technologies are getting "bigger and bigger."

Money Laundering and the Darknet
Since the takedown of infamous darknet marketplace Silk Road in 2013, bitcoin and crypto have been in the mainstream media spotlight, and in the sights of law enforcement and financial regulators worldwide when it comes to money laundering and illegal activities. U.S. Treasury Secretary Steven Mnuchin has claimed that bitcoin and crypto are a "risk to the financial system" while pushing back against the idea that the world reserve U.S. dollar is used comparably. "I don't think it's been successfully done with cash. I'll push back on that. We're going to make sure that bitcoin doesn't become the equivalent of Swiss-numbered bank accounts," Mnuchin stated in July.

AFP Acting Assistant Commissioner Gough says of the NPOCC:

We are honoured to have representatives from law enforcement, government departments and private enterprise … share their insights and to collaborate on how we respond to emerging technologies like cryptocurrency.

The response has already been swift and formidable. From numerous arrests of those transacting and trading in crypto — both criminal and non-criminal elements alike — to powerful tax agencies like the IRS issuing thousands of warning letters to potential crypto non-filers and money launderers, it's clear law enforcement worldwide means business. The question of what kind of similar enterprise in trafficking, money laundering and tax evasion is being done with the almighty USD remains noticeably off the table, however.

Worldwide Enforcement Efforts
It will be interesting to hear the conclusions of this week's Brisbane conference, and to see what developments proceed from the talks on monetization of cybercrime via crypto. Already global policymakers and joint enforcement initiatives such as the Financial Action Task Force (FATF) and the Joint Chiefs of Global Tax Enforcement (J5) are working to broaden the intelligence and enforcement dragnet for targeting unauthorized and permissionless financial activity worldwide. As the NPOCC's problematic "Digitisation of the Criminal Economy" continues, the crypto space can expect even more scrutiny and heightened KYC/AML compliance measures in 2020.