- A Queensland Government review into the state’s criminal proceeds confiscation laws has recommended updates to better cover the usage of digital assets by crime groups.
- The review suggests current laws aren’t adequate to handle what it says is the growing use of digital assets for money laundering in the state.
- Research from Chainalysis suggests that globally, money laundering using crypto was down in 2023 and that the majority of this laundering occurs on exchanges with anti-money laundering requirements, making it easier to track criminals.
Queensland’s Crime and Corruption Commission (CCC) has published the results of a review into the state’s Criminal Proceeds Confiscation Act (2002) which includes seven priority reform areas and 10 recommendations intended to modernise the sunshine state’s asset confiscation regime.
The review highlights the growing role of digital assets in serious and organised crime and claims the state’s existing asset confiscation regime is failing to keep up with these technological advancements.
Related: Northern Territory Police Warn Crypto Scams Pose Huge Threat After Billions in Losses
How Does This Review Impact Crypto?
The report, Modernising Queensland’s asset confiscation regime, highlights how the use of digital assets has increased within organised crime groups:
…digital assets, in particular cryptocurrencies, are increasingly used by organised crime and other criminals to launder money due to their mostly unregulated, near-instantaneous transactions across borders and the difficulty in tracing and confiscating them.
Queensland Crime and Corruption Commission reportOf the review’s 10 recommendations, three specifically relate to how digital assets, such as cryptocurrencies, are handled. These three recommendations are listed within the report’s first two priority areas for reform, possibly indicating their urgency:
- The first recommendation simply says Queensland’s offences of money laundering and “possession of property suspected of being tainted” should be updated to ensure they’re fit-for-purpose, including specific provisions to cover digital assets.
- The second recommendation, which falls under “Priority Area 2: Enable effective seizure of digital assets,” says relevant legislation should be updated to define what digital assets are and enforcement powers should be created to allow “effective seizure” of these assets.
- The third recommendation also falls under priority area 2 and says courts should be granted powers to decide if confiscated digital assets should be converted to more stable assets pending the outcome of confiscation hearings.
What’s The Scale Of This Problem?
According to the report, in 2022-23 between AUD$10 billion and AUD$25 billion of ill-gotten gains were laundered in Queensland. The report also claims much of this laundering activity involved the use of digital assets, although the exact value of digital assets laundered during this time wasn’t specified.
So what do the crypto experts have to say? Well, research from blockchain analytics firm, Chainalysis, showed that globally, money laundering using crypto actually shrank in 2023 compared to 2022, with crypto criminals laundering just over US$22 billion, down from a record high of US$31.5 billion the previous year.
Related: US Senators Introduce Bill to Crack Down on Crypto
According to Kim Grauer, Director of Research at Chainalysis, 72% of illicit digital assets were actually sent to just five different centralised exchanges to be laundered, and these exchanges generally have anti-money laundering requirements, making the criminals easier to track down:
The good news is that centralised exchanges offer opportunities to freeze and seize crypto assets associated with illicit activities. Thanks to increased investments in compliance, including continued implementation of stringent KYC (know your customer) and AML (anti-money laundering) measures, exchanges and law enforcement agencies can prevent bad actors from cashing out their ill-gotten gains
Kim Grauer, Director of Research at ChainalysisCredit: Source link
