A United Nations official said on Thursday that cryptocurrencies had made efforts to fight cybercrime much more difficult by adding a new level of secrecy that favors the criminals.
Speaking on the PM program on Australia's ABC Radio Neil Walsh, head of the Cybercrime and Anti-Money Laundering (AML) unit of the UN's Office on Drugs and Crime, used as an example the use of cryptocurrencies in the funding of child slavery and sexual abuse and the sale of sexually-exploitative material.
He said that police found it very difficult to manage such risks because payment for such illegal activities are increasingly being conducted in cryptocurrencies which are extremely difficult to track. He added:
When you add a layer that is encrypted, anonymous or pseudo-anonymous, that makes it very difficult for investigators to counter that challenge. It makes it easier for the bad guys to do what they do.
Financial Action Task Force
Walsh acknowledged the work being done by global regulator the Financial Action Task Force (FATF) to ensure crypto legislation falls into line with AML laws, but called on national regulators, governments and industry experts to help further develop regulation of cryptocurrencies.
It's going to take lots of different brains. It's going to take technologists, policymakers, philosophers - the whole nine yards.
It was announced in early August that the financial regulators of more than 15 countries were to work with the FATF to develop a system that will gather and share transaction details from individuals.
Earlier recommendations by the FATF have included the ability to impose restrictions or suspend virtual asset service providers that fail to comply with AML requirements, preventative measures such as customer due diligence, record keeping and transaction monitoring, and international cooperation between national regulators.
Failing the Cryptocurrency Ethic
But given cryptocurrency's business model includes the decentralization of money and the added layer of anonymity that brings, Walsh believed it was incumbent upon the platforms of exchange to add some accountability.
Finally, Walsh addressed the topic of cybercrime to fund international terrorism. He said that his job and that of his 70 staff around the world, working together with global police representatives, was to hit organized crime in the pocket. He added:
We have to be doing this to keep the most vulnerable in our society safe. When you take the profit out of criminality and stop that flow of profit you really have an impact on the bad guys.