Crypto Criminals Are Posing Hurdles For The Crypto Industry’s Future

UAE — Many countries across the globe are striving to create an eco-system that would facilitate the growth of the crypto industry along with their country.

However, crypto criminals always keep an eye on such nations that have recently started working to create regulations for this industry in order to find a loophole in their legal and regulatory system to carry out illicit activities such as money laundering, terror financing, drug trafficking and many other.

Fraudsters laundered $8.6 billion worth of cryptocurrencies in 2021, a thirty percent increase from the year before, as per Chainalysis’ 2022 Crypto Crime Report. Self-proclaimed crypto experts and consultancy firms have also contributed to crimes related to cryptocurrency by spreading information that isn’t necessarily right. Estonia, a Baltic country of 1.3 million people that had aimed to become one of Europe’s top crypto centers, is clamping down on the digital assets it previously championed. Estonia was once known as a “Crypto Trailblazer.” The regulatory crackdown is a symbol of a larger initiative by European officials hurrying to confront the threats that the crypto markets, as they expand in size and complexity, represent to the financial system. Similarly, Singapore was also an ambitious nation pertaining to cryptocurrency. However, a bill that just passed in Singapore tightens regulations for cryptocurrency service providers there. One of the major threats that the crypto industry currently faces is the presence of crypto criminals. These once crypto-friendly nations have now had a reality check after crypto criminals have exploited the industry and favorable crypto regulations created by such nations.

However, authorities are becoming more aware of these operations. Some nations are even using blockchain-based technologies to outwit these technologically skilled criminals and put a stop to their activities. In order to combat the growing drug trafficking in the Strait of Gibraltar, the Spanish police formally declared that it would be using the funding to install blockchain-based crypto-surveillance technology. In these waterways, which connect Spain with Morocco and Gibraltar, they assert, cryptocurrency is being widely utilized to finance drug trades. The establishment of a new crypto crimes team was also announced by the FBI. This new task force, known as the National Cryptocurrency Enforcement Team (NCET), will use its own blockchain research to find and seize assets used in cryptocurrency crimes.

The cybercrime division of the Dubai Police in the United Arab Emirates followed suit at the World Police Summit by stating that it will use blockchain technology and Artificial Intelligence (AI) to detect illicit activity. Police are undergoing a transformation as a result of technology. Authorities are always looking at the newest technology in order to combat crimes related to cryptocurrency. Due to the potential for cryptocurrency to be used for money laundering and criminality, Dubai Police and the Ministry of the Interior are keeping an eye on it. AI would also assist the police department in anticipating and predicting future occurrences and results.

Governments need to concentrate on creating law enforcement tools, technical skills, expertise, and resources to stop such technologies from being used to launder illegally obtained assets because blockchain, bitcoin, and other virtual currencies enable quick, anonymous financial transfers to any location in the world. It is pivotal to cooperate to stop virtual assets from turning becoming safe havens for illegitimate financial activities because cryptocurrencies are altering the landscape of the criminal underworld. This type of global, multi-sector event is essential to global security because protecting citizens and the global economy from the misuse of cryptocurrencies and other virtual assets requires concerted and sustained action by law enforcement working side by side with governmental authorities, regulators, and the private sector.

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