Search ForexCrunch
  • Cryptocurrencies are apparently making terrorist financing, money laundering and cyber-crime easier.
  • The official feels that cryptocurrencies provide a “new layer of secrecy that favors the criminals.”

A top United Nations (UN) official said that cryptocurrencies are making it “exceptionally difficult” to confront challenges like terrorist financing, money laundering and cyber-crime. Neil Walsh – Chief of the Cybercrime and Anti-Money Laundering arm of the UN’s Office on Drugs and Crime – asserted that cryptocurrencies provide a “new layer of secrecy that favors the criminals.”  

During his conversation with the Australian Broadcasting Corporation’s Linda Mottram, Walsh specified that he was worried about the role cryptocurrencies play in the child trafficking industry. He said:

“In the past, when we looked at some of the really big high-threat areas like kids getting abused online, it had to be paid for and now, with the use of cryptocurrencies, it’s exceptionally difficult for investigators to track that and try and manage that risk down.”

Walsh said the trade now runs on cryptocurrency, later adding that “child abusers are successful when they can create secrecy.” He further said:

“When you add a layer that is encrypted that is anonymous or pseudo-anonymous, then it makes it very difficult for investigators to counter that challenge and also, it really makes it easier for the bad guys to do what they do, and that creates risks, especially for our children.”

Further, Walsh said efforts should target crypto exchanges where illicit funds may be laundered. Added security protocols would not interfere with the average user, he suggested, as “there isn’t really a large amount of risk around declaring who you are and that you have an interest in moving value.”

Walsh pointed out the efforts made by the Financial Action Task Force (FATF) as one feasible method to track anyone who might be moving value using cryptocurrencies. FATF is an intergovernmental organization dedicated to resisting money laundering and terrorist financing. Walsh also revealed that the U.N. has brought together policymakers and experts to work on finding the best policy to regulate the space:

“We’ve brought together those policymakers, lawyers, those cryptocurrency experts to try and look what policy might look like in this space, because when we look at some of the really high-risk crime where we see kids, I’m talking babies very, very young, six months old and younger, who are in pay per view live online child sexual abuse streaming websites. That’s getting paid for by cryptocurrencies. We need to have some sort of options. We need to know how we try and challenge that threat and reduce the risks for kids and reduce the opportunities for criminals to get involved. And it’s gonna take lots of different brains. It’s going to take technologists, policymakers, philosophers, the whole nine yards.”