While crypto criminals create increasingly sophisticated challenges for the crypto industry itself, global law enforcement and regulatory agencies have also identified gaps that need to be closed if they want to catch up with scammers, fraudsters, and hackers.
According to Europol, at last week’s 9th Global Conference on Criminal Finances and Cryptoassets, three key gaps were identified in legislation, implementation, and law enforcement’s capacity to fight crime.
Therefore, participants agreed that new common standards need to be developed, cooperation deepened, and investments in law enforcement capacity increased.
"The criminal use of cryptocurrency is becoming increasingly professionalized, but so too is the global response," Burkhard Mühl, Head of Europol's European Financial and Economic Crime Centre, was quoted as saying.
For example, Europol said it is investing "in innovation, technology and cooperation with private partners" while advanced tools have reduced reliance on manual tracing.
"The borderless nature of blockchains means criminal proceeds can cross the globe in seconds, while formal cooperation between authorities can still take days or weeks," the European Union Agency for Law Enforcement Cooperation emphasized, adding that many agencies still lack the skills and resources to pursue leads or recover assets.
Meanwhile, Ned Conway, Executive Secretary of the Wolfsberg Group, an association of 12 global banks focused on the management of financial crime risks, said that better communication between banks and crypto companies will help disrupt illicit finance as well.
As reported by Cybernews earlier this year, at least three initiatives emerged in an attempt to prevent and fight crypto-related crimes. Back then, blockchain sleuth ZachXBT highlighted multiple challenges that made fighting crime more complicated. For example, the majority of law enforcement agencies might not be sufficiently competent to trace basic thefts and seize frozen funds from centralized platforms. Meanwhile, smaller thefts may never be assigned to police officers due to a lack of resources.
Private initiatives such as the T3 Financial Crime Unit have stepped in. Last week, the joint initiative from crypto players such as Tether, TRON, and TRM Labs said that it has frozen more than USD $300 million in "criminal assets" globally.
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