FATF Encourages More Cryptocurrency Monitoring

The Financial Action Task Force (FATF) has stated that the country needs to do more with regards to monitoring cryptocurrency. The report released from the task force essentially states that the country isn’t doing enough with regards to ensuring that cryptocurrency is used as conduit for terrorist financing and money laundering. For those who are unaware, the FATF is an organization formed by the G7 in order to address international money laundering.

Report Details

The report claims specifically that the UK faces severe threats from international terrorism, and that “virtual currency providers are not yet covered by AML/CFT requirements.”

The report elaborates: “The UK acknowledges the inherent vulnerabilities associated with the anonymity of VCs [virtual currencies], and while the risk of ML/TF in this area is assessed as low, the UK acknowledges that there are intelligence gaps and VCs are being used in illicit activity (particularly in online marketplaces for the sale and purchase of illicit goods and services).

It continues: “As a result, the UK intends to regulate virtual currency exchange providers under its implementation of the EU’s fifth Anti-Money Laundering Directive.”


The report actually praises the UK in terms of how it deals with financial crime. It states that the U.K. has a “robust understanding” of monitoring and preventative measures with regards to the issue, and noted the fact that it conducted thousands of investigations last year, which resulted in 1400 convictions.

The report does seem to imply that the cryptocurrency sector could be a weakness for criminals to exploit. However, it recognizes that as of right now, the issue is not a central threat to the country. Specifically, the report states: “This is an emerging risk and there is not yet evidence to suggest that broad scale ML/TF is occurring in the UK through this relatively small sector.

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3 Thai siblings deny Bitcoin-related money laundering scheme

Actor Jiratpisit ‘Boom’ Jaravijit, 27, and two of his siblings pleaded ‘not guilty’ to charges of money laundering at the Criminal Court in Bangkok. The actor, his brother and sister are embroiled in a money laundering scheme in which they are alleged to have swindled a 21 year-old Finnish investor off 797 Million baht ($27 Million) in Bitcoin. They are later reported to have laundered the proceeds through buying of land across various locations in Thailand before being apprehended.

Finnish victim

In the suit, the prosecution alleges that on diverse dates between June and December 2017 the trio and six other accomplices lured Finn Aamai Otava Saarimaa into investing with them. He said that on the advice of the three defendants, Mr. Saarimaa bought shares in Expay Software Co., invested in Dragon coin of NX Chain Inc. as well as buying 500 Million shares in DNA (2002) Co. The victim transferred the full amount needed to effect the above investments to the trio’s accounts in Bitcoin to their e-wallets.

Three defendants and six accomplices

However, the defendants and their six accomplices did not act according to the investment agreement. The investments were not filed. Records emerged that the trio had sold digital assets worth 797.41 Million baht.

The prosecution tracked the funds from the point of sale. The trail led investigations to a finding that the money had been used to acquire several blocks of land in Thailand. Mr. Saarima however received no Returns on his Investments which led him to take up the matter with the Thai Crime Suppression Division (CSD).

Revoked passport

The prosecution charged the three Jaravijit siblings with Collusion and conspiracy to launder money. Jiratpisit and Supitcha were arrested in August and freed on a $61,000 bail each.  The third sibling, Prinya Jaravijit however fled to the U.S. in an attempt to escape the trial. The CSD revoked his passport and travelling documents which made his stay in the U.S. illegal. Upon returning to Thailand, he was arrested in Bangkok and detained without bail.

The case against the trio will resume on December 24 when witness examination will be conducted. CRYPTO IS COMING!

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Authorities Arrest 23-Year Old Woman For Stealing Cryptocurrencies

A Cybercrime squad in Riot arrested a 23-year-old woman in Sydney who is believed to have stolen cryptocurrencies worth $450,000.

The woman was arrested on Thursday morning after police raided her home in Epping. During the arrest, police seized computers, mobile phones, documents and hard drives found in her possession. Police are yet to confirm whether she acted alone on the crime. The suspect is believed to have been responsible for stealing 100,000 units of Ripple that belonged to a 56-year-old man.

According to reports, the victim reported the matter to the police earlier this year in January. In his statement, the victim claimed that someone stole his cryptocurrencies after they managed to lock him out of his trading account. The 56-year-old explained that the criminal (s) locked him out of his account which had 100,000 units of Ripple worth at the time $450,000.  After countless attempts to access his accounts, the victim finally gained access to his account and discovered that his money had been transferred to a Chinese exchange where it was converted into bitcoins. The currencies were then sent to multiple electronic wallets.

Upon investigations, police discovered that an email account belonging to the victim had been hacked last year. This provided the criminal with the victim’s account. Further investigations led authorities knocking at the woman’s door.

Police Caution Investors

Arthur Katsogiannis, the cybercrime squad commander, stated that this was the first time Australian officials were charging an individual for the technology-enabled theft of cryptocurrencies. He warned investors to trade with caution as this type of crime could become the new norm.

Katsogiannis further added that to prevent such incidents, investors will have to treat their personal information like valuable commodities. He urged investors to be extra careful with their passwords, and any other account details that might be used by criminals to steal their funds.

In conclusion, the Detective Superintendent Katsogiannis stated the government in Australia and other law enforcement agencies are working to regulate cryptocurrency exchanges in the coming days.

Increased Level of criminal activities in the crypto space

Lately, there are more and more headlines on various crypto crimes like fraud, hacking and money laundering.

Recently, a study showed that money laundering in Europe had cost authorities about $ 5 billion in revenue.

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Crime Doesn’t Pay – At Least Not In Bitcoin

Invariably the first thing someone new to the crypto space asks about is whether Bitcoin is used for crime. Organised crime, sinister crime, dark web crime.

“Isn’t that used to buy drugs and fund terrorists?”

Why, yes, yes it is. it’s money.

You know what else is used to buy drugs and fund terrorists?

Fiat currency. The vast majority of drugs are bought with fiat currency, and unlike Bitcoin, cash isn’t traceable unless someone’s been writing down all the serial numbers. It’s anonymous.

A common misconception is that Bitcoin is an anonymous currency as well, but that’s not quite true – as we’ve mentioned here on Crypto Is Coming before, Bitcoin is actually pseudonymous, meaning that people make transactions under the pseudonym of their public key (the Bitcoin address is like their ‘name’).

While it’s not immediately obvious who’s spending what, and people can and do get away with transferring Bitcoin without being successfully traced, Bitcoin leaves a far more permanent and transparent “paper trail” than any other kind of money – the blockchain.

The Bitcoin blockchain ledger stores all of the transactions that were ever made – you can literally trace the very first Bitcoin transaction all the way down to today.

Because each Bitcoin has its own cryptographic signature, it’s not really fungible – instead of having ‘a’ coin like with fiat, you have ‘that specific coin that was used in a drug deal in 2004 and was then split into three sums and used to buy computer parts and play satoshi dice.’

It’s actually incredible how traceable it is, and all it takes is to make one proveable connection between a person and a BTC address to learn every transaction they’ve ever made – not exactly ideal for criminal masterminds.

Funding Terror

Recently I visited a dark web marketplace aimed at funding paramilitary jihadists in Syria to buy weapons and combat training (seriously). The site accepts Bitcoin, because it’s the most famous currency and everyone knows it – it also accepts Monero, because it’s anonymous.

How much money was in the Bitcoin wallets? None. How much was in the Monero wallets? I have no earthly idea – the Monero blockchain isn’t transparent, and there’s no way of tracing funds once they’ve been sent which is why it’s used so often in cryptojacking malware.

Benjamin Strickland, the investigator who first put me on to the site, routinely investigates Bitcoin crime, and once traced a series of transactions that connected Syrian paramilitaries (different ones), South African kidnappers, and international scammers and extortionists all to the same wallet, proving a link between all the groups.

When I spoke to Strickland about this he pointed out that Bitcoin isn’t a good currency for committing crimes due to the inherent lack of anonymity, a far cry from the public perception that Bitcoin is for masked hoodlums only.

You know who else pointed this out recently? Subject matter expert Yaya Fanusie director of analysis for the Foundation For Defense of Democracies Center on Sanctions and Illicit Finance. He stated that while a number of terrorist groups including al-Qaeda and the Islamic State have attempted to raise funds using cryptocurrency several times without achieving any notable success.

He cited paramilitary group Mujahideen Shura Council (MSC) as one example – their crypto fundraising campaign ran for several weeks in 2016 and ended up netting just a little over $500 in donations.

Fanusie said that “cold hard cash is still king,” pointing out that many of the terror groups his audience were concerned with lived in areas with poor infrastructure making Bitcoin a complicated choice.

You know who his audience was?

The US Senate. Maybe now it’ll start to sink in for them. To play the devil’s advocate, white supremacist groups in the US have had much more success in their BTC crowdfunding efforts, perhaps due to having readier access to the appropriate technology.

Funding Drugs and Money Laundering

The same goes for drugs, although here we get into murkier waters. Dark web marketplaces offer Bitcoin mixing services, which amounts to money laundering – users swap currencies around between each other at random to attempt to confound the efforts of investigators like Strickland, making it much more difficult to trace.

This is more common in drug dealing online due to the comparatively small amounts of money in each transaction (for the most part), leading to many thousands of transactions taking place in a vast network of drug consumers who are available to swap currencies in the mixing service.

Bitcoin drug purchases represent a tiny, tiny, tiny fraction of all drug purchases which are mostly made with curencies like the US dollar, but yes, this mixing service helps with anonymity. That said, if the FBI really want to track someone down using Bitcoin, they can – case point, Ross Ulbricht; Dead Pirate Roberts.

Silk Road Bust

Despite his best efforts, after years of allegedly running a billion dollar black market on the dark web Silk Road admin Ross Ulbricht was eventually identified and arrested by the FBI.

While they haven’t revealed all of their secrets, refusing to explain how they located the servers, what we did learn from their investigation was illuminating and demonstrated that evidence can stick around on the web for a long time.

An FBI agent codenamed Agent-01 found Bitcoin Talk posts from 2011 under the username ‘Altoid’ who wrote repeatedly about the Silk Road, perhaps as a means of shilling it to would-be customers:

“Has anyone seen Silk Road yet? It’s kind of like an anonymous I don’t think they have heroin on there, but they are selling other stuff.” Eight months later, Altoid posted again seeking a “pro in the Bitcoin IT community” – and directing interested parties to contact

From there the feds drew connections between the DPR persona and Ulbricht, such as repeated references to the school of economics outlined by Ludwig von Mises. The FBI said that while DPR used a VPN, the server it was accessed from (according to the subpoenaed VPN records!) was in an internet cafe near Ulbricht’s home.

They arrested him in a public library, making sure to wait until he was logged in so they wouldn’t need to try and crack his passwords, simply plugging in a flash drive to extract unencrypted content from his laptop.

26,000 bitcoins were tracked (over $40 million at the time), identified as being funds used in drug trafficking, and seized due to the accessibility of the blockchain record.

Bitcoin is many things – a pioneer, a groundbreaking achievement, kind of a pain in the ass when the network gets clogged – but it’s not a suitable means of funding terror or organized crime.

Unfortunately for the FBI and their international counterparts, that is the realm of privacy coins.

Crypto Is Coming!

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J5 Alliance Established To Combat Crypto Tax Crimes

An alliance of 5 nations, including the UK and US, has been established to look at ways to tackle financial crimes, including looking at cryptocurrency and the fact that it is being used to avoid paying local taxes, as well as for money laundering.

Regulations Needed?

There has been a lot of call for transparent regulations, not only from governments but from some analysts and investors too. They believe that regulation will provide stability, flatten out some of the volatility that is present in the marketplace, and attract more investors, in particular institutional investors. Some countries have made moves to counter what they perceive as a growing financial threat. China initially banned all cryptocurrency trading, although they have softened their approach recently, while the Reserve Bank of India has directed all banks to wind up trading with any cryptocurrency exchanges. During a meeting of the G20 nations in April this year, the world’s largest economies concentrated a lot of discussion on the topic of how best to tackle the problem, although nothing concrete has been determined or announced.

Investigating Cryptocurrency Crimes

The Joint Chiefs of Global Tax Enforcement (J5) has not been set up to determine overall regulations, but they will be looking at how to tackle cross-border financial crimes. Cryptocurrency does not operate within any geographical boundaries, and the group has said that they will be looking at cryptocurrency because there is the potential that criminals will increasingly use it to launder money, but also because of a lack of financial reporting for tax purposes.

The group is made up of the Australian Taxation Office, the Canada Revenue Agency, the Fiscale Inlichtingen-en Opsporingsdienst of the Netherlands, H.M. Revenue and Customs of the UK, and the US Internal Revenue Service Criminal Investigation.

International Collaboration

According to the J5 website, the group will “collaborate internationally to reduce the growing threat to tax administrations posed by cryptocurrencies and cybercrime and to make the most of data and technology.”

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