- Organized crime syndicates and gangs worldwide are exploiting crypto technology.
- Authorities are finding ways to curb the menace and address the situation.
With its benefits, cryptocurrency is inadvertently aiding organise crime syndicates to manage their businesses and wealth. For British Columbia (B.C.) citizens, organized crime and the associated wealth is nothing new. Data suggest that these gangs have incorporated the latest technology better than the rest to flourish in the current era.
Cryptocurrency, Organized Crime, and the Gangs of British Columbia
Law enforcement nearly succeeded in curbing the crimes in B.C., but incorporating new technology paved the way to circumvent these enforcements. They can now quickly transfer their ill gains around the globe using cryptocurrency, e-wallets, anonymous money transfers, etc.
They exploit video-game money transfers facilitated in many metaverse and online games and crypto markets on the dark web to move funds. Hilary Morden, an expert on B.C. gangs, shared insights on how these gangs leverage crypto’s benefits.
During her research, she interviewed over 100 active gang members between 2016 and 2017 for her study at Simon Fraser University. She is a criminology, forensic, and psychology professor. During her research, she found that these gang members made millions of dollars and needed help keeping the money safe or transferring it without getting caught.
Many top-tier members purchase multiple high-valued properties, mansions, paintings, sports, luxury cars, etc. But this spending, more often than not, invites attention from the authorities, denting their operations and leading them to imprisonment. So, the older and wiser gang members explored the crypto technology and adopted it with open arms.
How Do Gangs and Bad Actors Exploit Cryptocurrency?
In the early days, gang members had to sell drugs from secure locations in the country, but the evolution of smartphones made it possible to run the empire from anywhere in the world. Still, the authorities could track the money trail and bust these gangs. Still, as these organizations started using cryptocurrency, e-wallets, and other methods, the money trail is almost nonexistent.
Using cryptocurrency, these gangs can easily hide their money. They do not need to prove to anyone how the money was made. They can quickly turn all this black money into white by explaining the gains as crypto earnings. The anonymity scenario of crypto helps them in maintaining privacy.
Additionally, the crypto markets on the dark web have revolutionized the business. Researchers discovered that anyone could buy illicit drugs, sell guns, hire someone to commit a crime, etc. It works as a marketplace for buyers and vendors. It should be noted that hundreds of such websites facilitate billions of dollars worth of business.
How Authorities Can Curb this Menace?
Other than offering great benefits as an alternative to traditional finance, crypto facilitates money laundering, dark-web crypto markets, etc. Bad actors exploit these benefits and avoid getting caught by the local or international authorities. Only a strict regulatory framework can save crypto from exploitation by these bad players.
Strict anti-money laundering (AML) laws and counter-terror funding (CTF) laws should exist. Also, exchanges should have KYC and agree with the authorities to share data when required. Even if a jurisdiction installs a strict regulatory framework, the internet will allow gang members to control the business from anywhere.
The International Organization for Securities Commission (IOSCO) released a draft for global crypto regulations in May 2023. If the current draft is convert into law, smaller jurisdictions primarily affect by these gangs would have a system to curb these crimes. The perpetrators would have no space to hide as well.
Strict regulations and joint efforts from local and international organization is the only way to stop these crime syndicates.