Tracking Cryptocurrency Crimes: Why are Traditional Investigative Methods Key?
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In the first two episodes of our series on Fraud Prevention and Anti-Money Laundering, we spoke with blockchain intelligence analysts and currency flow experts to understand the various forms of international blockchain financial crimes. In this episode, we shift our focus back to Taiwan to explore the common criminal methods and discuss how we can establish a healthier cryptocurrency ecosystem.
️ Further reading:
【Web3 Goes West】From National Intelligence to Blockchain Intelligence Analysis! TRM Labs Analyst: Must Outsmart Fraud Groups in Technology Competition
Prosecutor Luo Wei-yuan from the Taipei District Prosecutors Office, who was previously responsible for investigating major financial violations, attended a conference in the United States in 2019 with Prosecutor Hong Min-chao, who has also appeared on the Fraud Prevention and Anti-Money Laundering series. At the conference, they were exposed to discussions related to cryptocurrency, which sparked Luo’s interest in researching cryptocurrency crimes.
Today, Prosecutor Luo Wei-yuan is an expert in virtual currency investigations and compliance with multiple licenses from TRM Labs, an internationally renowned blockchain analytics company. He is frequently invited by the Anti-Money Laundering Office of the Executive Yuan, the National Police Agency, the Judicial Academy, the Judicial Officers Training Academy of the Ministry of Justice, the Taiwan High Prosecutors Office, and law enforcement agencies to give lectures on cryptocurrency crimes and practical experiences in technological investigations.
Prosecutor Luo Wei-yuan (pictured above) is an expert with multiple licenses in virtual currency investigations and compliance from the internationally renowned blockchain analytics company TRM Labs.
Prosecutor Luo believes that while using technology to track cryptocurrency crimes is important, traditional investigative methods are essential for successful case-solving. The involvement of victims, money laundering routes, and techniques are crucial aspects of investigation.
Although through currency flow analysis reports, we can thoroughly understand how criminal organizations attempt to hide their tracks and move funds, can these reports be used as evidence in court? Prosecutor Luo states that although Taiwanese courts are currently unfamiliar with this issue, in the United States, for example, the court would invite the creators of currency flow analysis reports to testify and explain the methodology behind producing these reports, as well as the significance of each analysis point, in order to determine the admissibility of the reports as evidence.
In the process of money laundering by fraud groups, an indispensable element is “dummy accounts” and “money mules.” After the implementation of the essential sub-law, “Temporary Suspension or Immediate Closure of Accounts and Account Numbers for Anti-Money Laundering Purposes,” on March 1st, dummy accounts will be strictly regulated, and sharing bank and exchange account passwords will be illegal! XREX has also updated its Anti-Money Laundering and Platform Usage Management Regulations to crack down on fraud groups and dummy accounts, taking strict measures against individuals engaging in illicit activities using cryptocurrency.
Summary of this episode:
What are the common factors in successfully prosecuting cryptocurrency cases in court?
Reporting a fraud case is not only about preventing others from becoming victims but also about increasing the chances of recovering the defrauded assets.
Wayne’s prediction: We will see more successful cases of seizing fraudulently obtained USDT in the future!
Do currency flow analysis reports hold evidentiary value in court?
How will “individual currency traders,” as the convergence point of fiat and virtual assets, be regulated?
Fraud Prevention and Anti-Money Laundering Series
Inviting industry experts to reveal the methods of fraud groups and money laundering operations from multiple perspectives, including investigation, money flow tracking, judicial systems, and cryptocurrency exchanges, and to analyze the pain points in evidence collection and law enforcement.
Web3 Goes West
Hosted by Wayne Huang and Winston Hsiao, co-founders of XREX Exchange, and Yoyo You, the Senior Director of XREX’s Executive Office, this series helps you understand the concept of decentralization and gain a multi-dimensional understanding of the Web3 world.
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