Cross-border Law Enforcement Collaboration Key To Curbing Crypto-Related Crimes ⋆ ZyCrypto

One of the benefits of cryptocurrencies is that they allow for financial transactions to be executed globally and in real-time. However, this same benefit has been used by criminals to conduct crypto-related crimes worldwide. Cross-border collaboration of law enforcement agencies has led to the investigation, prosecution and conviction of parties involved in crypto crimes.

In November 2020, the US Department of Justice reported that the United States (US) had seized virtual currency worth an estimated US$ 24 million on behalf of the Brazilian government in a cryptocurrency fraud scheme.

More recently, in February 2022, the U.S. Immigration and Customs Enforcement (ICE) and Homeland Security Investigations (HSI) collaborated on an investigation over an alleged conspiracy to launder cryptocurrency stolen during the 2016 hack of the Bitfinex crypto exchange. The Ansbach Police Department in Germany assisted in that investigation. 

In March 2022, US president, Joe Biden, issued an Executive Order (EO) to ensure the responsible development of digital assets in the US. Apart from the request for various federal agencies to work together towards developing a comprehensive regulatory framework for digital assets, the EO also requested law enforcement agencies to explore cross-border cooperation in the fight against cryptocurrency crimes.

The EO read: “Within 90 days of the date of this order, the Attorney General, in consultation with the Secretary of State, the Secretary of the Treasury, and the Secretary of Homeland Security, shall submit a report to the President on how to strengthen international law enforcement cooperation for detecting, investigating, and prosecuting criminal activity related to digital assets”.

On August 5, 2022, the US Department of Justice reported that an alleged Russian cryptocurrency money launderer was extradited from Greece to the United States on charges of operating an Illicit Bitcoin exchange alleged to have received deposits valued at over US$4 billion. The Greece Ministry of Justice assisted the defendant’s transfer to the US.

And in yet another recent development, Korea’s unregistered Virtual Asset Service Providers(VASP) have come under the spotlight. According to an August 18, 2022, press release, the Korean Financial Intelligence Unit (KoFIU) notified the investigative authority of 16 unregistered foreign-based VSAPs offering business services to the domestic market. As part of the actions to be taken against the unregistered VSAPs, the KoFIU plans to inform the Financial Intelligence Units (FIUs) of the respective countries of the unregistered VSAPs violations.

Given the global nature of cryptocurrency activities, law enforcement agencies are increasing the level of collaboration to investigate and prosecute crypto-related crimes. Such partnerships show that no place may be too far from the long arm of the law.