January 31, 2019 | AtoZ Markets -Despite the fall in the rate of cryptocurrency since 2017, its popularity among criminal actors remains high. Cybercriminals and some isolated countries, such as Iran or North Korea affected by the US sanctions use cryptos in money laundering. As a result, such states as the USA, Israel, and many EU countries are working on a legal framework for regulating and controlling cryptocurrency flows.
Cybercriminals use new fraudulent schemes
Cryptocurrencies might be used as a way to evade sanctions, in terrorist financing and money laundering. According to the founder and CEO of CipherTrace, Dave Jevans, one of the new schemes which involve digital currency is “crypto dusting”. In one of his recent cybersecurity interviews, he discussed the results of the company's latest cryptocurrency report and the fight against money laundering. Jevans explained that “crypto dusting” is a scam where criminals who carry out money laundering operation try to disable investigation and the ability of tools to combat money laundering. As CipherTrace CEO explained, fraudsters send every week tens of thousands of people a very small amount of cryptocurrency, which went through money laundering services. As a result, everyone who deals with cryptocurrency gets a negative reputation. As a result, "tools that use reputation scoring don't work anymore," he added.
Dave Jevans (pictured below) is the founder and CEO of CipherTrace, which specializes in the security of blockchains and the observance of anti-money laundering rules. He has 20 years of experience in security and payment markets.
CEO of CipherTrace has 17 US patents in the field of cybersecurity and also founded and sold three cybersecurity startups. He also chairs the anti-phishing working group, a consortium of more than 1,500 government agencies, financial services companies, Internet service providers, law enforcement and technology providers.
Cryptocurrency is used in various lawless activities
In an interview, Jevans also touched upon such topics as:
- the use of cryptocurrencies for money laundering by countries, including Iran and Venezuela, to avoid economic sanctions from the U.S;
- increased cases of cryptocurrency theft in 2018, despite the significant decline in the value of many currencies;
- the potential impact of regulations on the suppression of cryptocurrency money laundering schemes.
EU union and the USA and other countries working to strengthen the regulatory framework which will help to control the lawless usage of the cryptocurrency. in July 2018 the fifth anti-money laundering directive of the European Union has been put into effect. However, according to some of the online reports, the directive has been met with a wave of critical comments.
In May Israeli’s finance ministry has published the draft legislation in regards to the money laundering related to the cryptocurrency. Same year, in December De Nederlandsche Bank reported that they are considering an idea of requiring crypto companies to get licenses if they want to operate in the country. According to the bank, such measure will help to combat bitcoin usage in money laundering and the terrorism funding.
2019 started quiet unsuccessfully for certain exchanges like Cryptopia, which due to the security breach experienced significant damages. Recent cyber attack on Ethereum Classic resulted in $ 1.5 million loss and growing concerns about cryptocurrency safety. However, the upcoming regulations might have potential positive impact on taking money laundering using cryptocurrency under control.
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