Financial Investigators Recommend Governments to Create the Crime of Unexplained Wealth

Some hundred investigators of Europol and Interpol have attended an international conference on money laundering and virtual currencies. The recommendations they worked out are substantial. One of them is the creation of a new financial crime.

While Europe shakes under the frosty climate, about 400 experts and financial investigators from money laundering, cybercrime and financial intelligence units from Interpol, Europol and the Bases Institute on Governance enjoyed sunny temperatures. Between January 16 and 18, the investigators have been in Doha, the capital of Qatar, an Arabic dwarf monarchy which is famous for being the wealthiest country in the world, while abiding by Islamic Shariah law. In Doha, the Global conference on countering money laundering and digital currencies took place where investigators and scholars listened to experts and connected with private sector actors.

The focus of the event was the misuse of virtual currencies by criminals and, of course, terrorists. While there has been zero indication that any terrorist has ever thought of using cryptocurrencies, the fear alone, that it is possible, has become a dominant narrative of regulation.

Head of Financial Intelligence at Europol Bullish on Bitcoin?

In his talk, Simon Riondet, Head of Financial Intelligence at Europol, demonstrated a surprisingly optimistic attitude on Bitcoin and virtual currencies: “Digital currencies are now undoubtedly part of the payment system. Their use is expected to increase exponentially in the coming years. And understandably so, since they improve payment efficiency, reduce transaction and fund transfer costs, while facilitating international remittances.”

But, of course, all these kind words have only been a prelude for the “but” which makes everything before unimportant: “But the other side of this narrative is that they are also a powerful new tool for criminals and terrorist financiers to convert, remit and conceal illicit funds from law enforcement authorities.”

One goal of the conference was that the three partners – Europol, Interpol and the Basel Institute of Governance – develop a common approach to deal with the “growing threat posed by the use of modern payment methods in the commission of organized crime and the subsequent use of these methods to launder the proceeds of crime”, as a press release of the Basel Institute points out. Investigators, as experts of both the public and private sector, should learn to know the tools to track digital currency transactions and acquire the knowledge to identify, block and analyze the criminal misuse of virtual currencies.

Recommendation to the Governments how to Fight Money Laundering with Cryptocurrencies

At the end of the conference, the attendees presented a list of recommendations which should help the governments of the participating countries to control digital currencies.

According to them all countries should increase information sharing. Especially they should give attention to “the international exchange of suspicious Bitcoin addresses that threaten economic stability.” … Whatever that means.

Furthermore, all countries should train the experts and investigators with “manuals, training initiatives, exchange programs and international conferences.” Regulators, Prosecutors, Judges, Police officers and private partner should work together for this.

Also, the countries should develop, prepare and enforce “clear and simple guidelines” for private and public companies and entities operating in this field. Especially the transparency should be increased, and the access of regulators to information should be enhanced, and all exchanges and wallet providers should be regulated in line with the established Anti-Money Laundering rules. Mixers and Tumblers which help to anonymize digital currencies should no longer be tolerated.

Last but not least the attendees of the conference recommended the governments to create a new crime. “All countries are advised to consider the creation of the crime of unexplained wealth.” The existence of such a crime and “its usage as a predicate offense for the crime of money laundering” is considered as a key factor in fighting money laundering with digital currencies. Others may see it as a stroke against freedom, but this is another story.