As scam
compounds generate billions of dollars through
fraudulent cryptocurrency schemes across the Asia-Pacific
last year, APEC’s Anti-Corruption and Transparency Working
Group called for a timely workshop focused on tackling
crypto money laundering.
Anti-corruption officials,
financial regulatory experts and international law
enforcement organizations from across the region convened in
Dalian last week to find practical ways to trace, freeze and
seize corrupt crypto assets before they become
unrecoverable.
Cryptocurrency has become an
increasingly attractive tool for corrupt officials,
criminals and bribery players with its ability to transfer
across borders within seconds and its veil of
anonymity.
“This problem is bringing unprecedented
challenges to asset recovery, financial supervision and
cross-border anti-corruption cooperation across the region,”
said Chen Long, Chair of the APEC
Anti-Corruption and Transparency Working Group, opening
the discussion.
“Corruption is not a static crime, it
adapts to new tools and technologies and today that tool is
increasingly becoming cryptocurrency. Our joint task is to
make sure enforcement adapts just as fast,” he
added.
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Beyond coordination, anti-corruption
investigators also highlighted the importance of big data
and blockchain technology to identify and flag abnormal
capital flows and backtrace transactions to its root
address.
The workshop explored early detection methods
such as requiring every crypto transaction to be checked
against the identities of both sender and recipient before
funds are moved. The United Nations Office on Drugs and
Crime further pointed to the importance of having virtual
asset service providers build internal monitoring systems
within their platforms. Such systems can assist with early
warning and detect transactions law enforcement may
miss.
Tracing does not always translate into recovery.
Only 3.8 percent of the USD1.5 billion stolen in the Bybit
theft, one of the largest crypto thefts on record, has
ever been recovered. Research shown throughout the workshop
showed how 80 percent of jurisdictions rate only low to
moderate on their ability to recover stolen crypto
assets.
Interpol emphasized that tracing illicit
crypto assets and recovering them call for entirely
different technology, expertise and legal frameworks. In
response, experts discussed the development of capabilities
and specialized taskforces for seizing and returning virtual
assets to victims.
As formal investigation requests
can take months and can be slow in keeping up with crypto’s
speed, economies stressed the value of real-time, informal
information sharing between networks across jurisdictions
instead. Anti-corruption practitioners called for
strengthening and developing these networks further to
ensure faster joint responses to crypto-enabled
crime.
“To prevent and combat corruption, joint and
coordinated efforts from all sides is required. We need to
uphold zero tolerance on corruption and continuously
research new criminal methods together, improve coordinated
mechanisms and share technologies and expertise,” the Chair
concluded.
The workshop forms part of the
Anti-Corruption and Transparency Working Group’s continued
efforts to safeguard the integrity of the Asia-Pacific’s
financial systems and strengthen public trust in
them.
