CRYPTO FRAUD

From this blog we have always been major promoters of cryptocurrencies and the many benefits posed by these instruments. However, they can also be used as fraudulent tools (as often claimed by the traditional financial sector). In an attempt to be fair, we take this opportunity to develop this issue. Just as an example, you can check our Hong Kong partner’s article on a deepfake scam that costed the company USD 25.000.000.
One of the major vulnerabilities attributed to cryptocurrencies is the possibility to make quick transactions without the need to disclose the identities of the individuals involved. Even though cash is handed over or received without the need of disclosing one’s identity, it’s easier to make illicit transactions of millions of dollars with a simple click than with cash.
Regulatory agencies worldwide are seriously concerned with money-laundering and terrorism financing. As reported by InfoTechnology, a crypto trader in Argentina has been sentenced to 5 years’ imprisonment and fined for an amount eight times the amount credited as laundering (4
million dollars approx.) for laundering USD 500,000 for drug dealers. Conviction includes charges of complicity for storing 2 tons of cocaine with other 6 people. Illicit transactions were made peer-to-peer (P2P or “private”) or face-to- face (“F2F” through cold wallets).
We can conclude that bad actors are active in all markets. In this particular case, the scammer used cryptocurrencies to achieve his crime, though he could have used other instruments to defraud third parties. So, it is unfair to blame cryptocurrencies for illicit activities in general. Growing crypto adoption globally calls for an urgent regulatory framework to ensure legal and safe crypto transactions, keeping the privacy of users and companies of the entire crypto ecosystem.