Detective Superintendent Craig Bellis heads the federal police's Taskforce Avarus, its joint money laundering arm. Over the past three years, Bellis has seen a “significant increase… in the prevalence, use and continued expansion of cryptocurrencies” involved in money laundering.
In the 2022-23 fiscal year, the AFP seized more than $41 million in cryptocurrencies, equivalent to 11.7 percent of all its seizures.
"If you walk into a shop in the middle of the CBD that looks like a bank... you feel safe when you're handing them your money."
Detective Superintendent Craig Bellis
In an operation on February 1 last year, more than $29 million worth of cryptocurrency purchased with the proceeds of crime was discovered in 13 search warrants across Sydney.
The digital payments were discovered along with 18 designer watches, 17 designer handbags and at least 46 pieces of luxury jewelry, an insight into how the elusive dirty currency fuels the wealthy lives of the "cryptocurrency kings." The raids also uncovered 20 illegally purchased properties in Sydney, including two mansions worth a combined $19 million and more than $1 million worth of luxury cars, all of which were seized.
These criminals were among the most senior members of organized crime in Australia, Bellis said.
“The AFP claims that this group was at the center of a whole range of varied, transnational, serious and organized crimes. “So by openly attacking that group and eliminating that capability, the AFP had a direct impact on multiple criminal groups across the country at the highest level.”
One of the 46 luxury jewelry items seized in the police operation.Credit: AFP
Detective Superintendent Amelia McDonald, federal police national superintendent for the Criminal Assets Confiscation Task Force, explained the difficulties in seizing cryptocurrencies compared to tangible assets.
“Historically, we have trained all of our detectives to have an investigative mindset; Now it is also about having a digital mindset,” he stated.
“So with a warrant for police to search a home, you can improve across the enterprise what investigators should be looking for. The challenge with cryptocurrencies will be the speed at which they can be transferred. And unless that is in our power… it can dissipate very quickly.”
A police operation included the seizure of more than $29 million in cryptocurrency.Credit: AFP
Research shows that cryptocurrencies are increasingly influencing the black market for drug imports. A 2023 Australian Transaction Reporting and Analysis Center report described how law enforcement intercepted many packages containing MDMA and cocaine mailed from Europe to an individual in Australia. They discovered that he had registered an online account on a black market website and used the account to buy, import and sell illicit drugs using cryptocurrency.
The offender was sentenced to three years and six months in prison. But Bellis said prosecuting these criminals is not easy.
"You can't ignore the fact that their ability to immediately cross jurisdictions is incredibly attractive to criminal groups, because they can transfer value both domestically and internationally at any time," he said.
“In addition, it is a store of value. If you have $50 million in cash, it's much harder to hide it than it is in some kind of cryptographic device (a USB key), whatever it is. So there are several reasons why and how they are using it in this space.”
Charging
In addition to infiltrating the drug and money laundering market, ordinary people were victims of crypto scams.
Bellis explained that criminals exploit both the formal and informal remittance sectors. “They operate under the noses of ordinary Australians,” she said.
“I think if you walk into a store in the middle of Sydney's CBD that looks like a bank, feels like a bank, has customer service, has all of its 'Know Your Customer Regulations' on the walls, you feel safe when you're in front of them. providing your money and it is treated as it should be.”
Even those looking for love can fall victim to digital deception. The syndicates use dating sites, employment sites and messaging platforms to gain the trust of vulnerable victims before directing them to subscribe to a financial investment service that trades cryptocurrencies, which have been maliciously manipulated to show a return on profits. false positive investments.
They then manipulate the data to encourage greater investments and hide the fact that the money has been stolen.
Asked if the AFP has the ability to trace the anonymous blockchains that underpin the digital currency, McDonald said: "We absolutely do."
Without revealing a specific methodology, McDonald said the force has the largest dedicated cryptocurrency capacity for Australian law enforcement and works with state, territory and international police.
“We have detectives, financial investigators, forensic accountants, and the capacity of these teams means they can really investigate, trace and ultimately help bring them to court to prosecute them in support of an investigation,” he said. While they have prosecuted more than a dozen criminals related to crypto scams, all were in the early stages of court proceedings, so conviction statistics were not available.
Despite the capabilities of the AFP, undeniable legislative gaps remain. And when a case goes to court, a lack of knowledge about cryptocurrencies makes it difficult for jurors to understand the complexities of the alleged crimes.
A 2021 report from the Australian Criminal Intelligence Commission stated that it would support “legislation and policies that help law enforcement agencies combat crime in the digital domain, in the same way they are empowered in the real world.” .
Findings from the Australian Competition and Consumer Commission reveal that Australians lost $221 million to cryptocurrency scams in 2022. This prompted Treasurer Jim Chalmers to announce plans to offer greater protection to consumers and review loopholes in the regulations.
“Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt to the crypto asset sector,” Chalmers said at the time.
It remains to be seen whether legislative change can come quickly enough to prevent financial suffering for many more Australians, although McDonald said the AFP was committed to continuing to improve its skills in the ever-evolving space.
“[Cryptocurrency] “It is certainly here to stay,” he said.
“If you think about, five or ten years ago, we weren't using our mobile phones or our watches to pay for a coffee...cryptocurrency literacy is still not on a large scale, but people are becoming educated.”
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