crypto crime

Criminal use of crypto an ‘emerging threat’ — Australian police

Law enforcement will need to “continually evolve” in order to keep pace with criminals, Australia’s federal police said.

Australia’s federal law enforcement agency has highlighted the criminal use of cryptocurrency as an “emerging threat” in the country but says it’s a continuous challenge to keep up the pace with criminals.

A spokesperson for the Australian Federal Police (AFP) told Cointelegraph that there has been an “increase in the number of offenders using cryptocurrencies to facilitate illicit business and attempting to conceal the ownership of assets,” noting:

“The criminal use of cryptocurrency is an emerging threat for law enforcement.”

However, they admitted the biggest challenge for law enforcement is to “continually evolve” their “tools, techniques and legal frameworks” to keep pace with criminals, particularly as mainstream adoption of cryptocurrency increases.

Last month, the AFP established a new cryptocurrency unit focused on monitoring crypto-related transactions.

However, the spokesperson said that despite the previous establishment of crypto-focused units, “criminals are continuing to find opportunities to avoid law enforcement and exploit the public.”

Misplaced focus?

One Australian private investigator believes the AFP is yet to focus on the “prolific and profitable” crypto crime yet — online investment fraud.

IFW Global executive chairman Ken Gamble told Cointelegraph that most of the AFP’s focus recently has been on crypto money laundering relating to drug trafficking, cyber intrusion, ransomware, email compromise and hacking, but not “large-scale online investment fraud.”

Scamwatch data between January and July this year found that Australians had lost 242.5 million Australian dollars ($152.6 million) to scammers in 2022 already, with the majority of funds lost to investment scams, including romance baiting scams, classic Ponzi schemes and cryptocurrency scams.

The figure is already 36% higher than the that of the whole of 2021.

The investigator also believes that some law enforcement departments are still not fully equipped to handle crypto crime cases adding that “law enforcement agencies need better training and education on how cryptocurrency works.”

A report from analytics firm Chainalysis in July found that 74% of public agencies felt under-equipped to investigate cryptocurrency-related crime, with respondents indicating that many agencies did not use specialized blockchain analytical tools.

“There is a shortage of professional and certified cryptocurrency tracers rapidly involving the criminal industry,” said Gamble.

This may be soon to change, with a number of international and national authorities announcing the establishment of crypto-crime-focused units this year.

Meanwhile, Interpol (International Criminal Police Organization) recently set up a special team in Singapore to help the government fight crimes involving virtual assets.

Interpol secretary Jürgen Stock stated at Interpol’s general assembly in India on the need for further training in crypto for law enforcement, saying cryptocurrency “poses a challenge,” as agencies are “not properly trained and properly equipped from the beginning.”

Put your hands up! Interpol storms into the metaverse

Interpol’s metaverse is up and running and has been designed to streamline communication between various units, along with providing an avenue to conduct education and training.

The International Criminal Police Organization (Interpol) is putting on its virtual reality headsets as it prepares to crack down on an expanding list of “possible crimes” in the metaverse.

According to an Oct. 20 announcement, Interpol has launched the “first ever Metaverse specifically designed for law enforcement worldwide” — introducing it at the 90th Interpol General Assembly in New Delhi — already fully operational.

Interpol outlined that a key driver behind its jump into the metaverse is due to bad actors already leveraging the tech to conduct crimes, while public adoption rates are likely to significantly increase over the next few years.

“Criminals are already starting to exploit the Metaverse. The World Economic Forum […] has warned that social engineering scams, violent extremism and misinformation could be particular challenges,” the announcement reads, adding that:

“As the number of Metaverse users grows and the technology further develops, the list of possible crimes will only expand to potentially include crimes against children, data theft, money laundering, financial fraud, counterfeiting, ransomware, phishing, and sexual assault and harassment.”

Notably, people have already been put behind bars for their actions in the metaverse. Last month, a South Korean man was sentenced to four years in prison for sexually harassing children in the metaverse, and luring them to send lude photos and videos.

At the event in Delhi, Interpol also revealed plans to develop a division dedicated to cracking down on crypto crime. Interpol secretary general Jürgen Stock highlighted the need for the specified unit, as many law enforcement agencies are not currently equipped to deal with the complexities of the sector.

The special director of India’s Central Bureau of Investigations, Praveen Sinha, also noted that it has become increasingly difficult to monitor cybercrime due to its global nature and that coordination is a key factor that will make their efforts easier.

“The only answer is international cooperation, coordination, trust, and real-time sharing of information,” Sinha said.

The new Interpol metaverse will allow registered users to visit the platform and take a tour through a “virtual facsimile of the Interpol General Secretariat headquarters in Lyon, France” and partake in forensic investigation courses, among other things.

Interpol has outlined that its metaverse will hopefully provide a more streamlined and efficient way for its various outfits across the globe to communicate and work with each other. While education and training for students/new recruits was also highlighted.

Earlier this week, the Ajman Police announced it would provide its services to customers through metaverse technology, according to an Oct. 16 tweet from the authority.

Downfall of Canada’s Lambo-driving ‘Crypto King’ reportedly sees $35M in losses

The founder of a fraud recovery law firm says the only other avenue available for investors would be to make reports to the Ontario Securities Commission or the police.

A self-described 23-year-old “Crypto King” is facing a raft of demands among 140 of his investors as they try to claw back a collective total of $35 million from his company AP Private Equity Limited.

According to a Tuesday CBC report, creditors are hard at work trying to unravel where all the money ended up that they allegedly gave Canadian Aiden Pleterski to make crypto and foreign exchange investments on their behalf.

A bankruptcy trustee’s report, creditors meeting minutes, court filings and complaints made to Investigation Counsel PC reveal Pleterski owned 11 vehicles, leased four other luxury cars, regularly flew on private jets and was living in a lakefront mansion that was $45,000 a month to rent.

So far, roughly $2 million worth of assets have been seized, among them two McLarens, two BMWs and a Lamborghini.

Norman Groot, the founder of Investigation Counsel PC — a fraud recovery law firm — claimed the “large lifestyle burn rate” still doesn’t “account for the amount of money that’s missing.”

An initial lawsuit brought against Pleterski resulted in his assets and bank accounts being frozen, but that has now been superseded by bankruptcy proceedings. At this stage, it is the only recovery process for investors because bankruptcy proceedings take precedence over civil claims.

Groot said that “the only other avenue available for investors would be to make reports to the Ontario Securities Commission and the police.”

“Those processes are lengthy,” he said adding, “The more time that goes by, the less likely there’s a recovery of evidence and less likely there’s a recovery of money.”

Groot said the warning signs for investors of excessively high returns were there for all to see, stating:

“Five per cent interest [a week] is not available on the open market. A 23-year-old kid is unlikely to be the next Bill Gates — talk to somebody who is conservative and get a second opinion.”

Creditor Diane Moore invested $60,000 and said her investment contract gave her the lion’s share of a 70-30 split on any capital gains, which were targeted at 10 to 20 percent biweekly.

“The whole thing was based on trust,” she said, claiming to be out of pocket $50,000.

Pleterski’s lawyer Micheal Simaan has disputed the allegations and said his client has been cooperating fully with the bankruptcy process.

According to Simaan, his client started investing in crypto as a teen. His success during the bull markets prompted others to offer cash freely for investments in the hopes of striking it rich.

“Shockingly, it seems that nobody bothered to consider what would happen if the cryptocurrency market plummeted or whether Aiden, as a very young man, was qualified to handle these types of investments.”

Pleterski claimed his investment company ran into trouble thanks to “a series of margin calls and bad trades,” possibly exacerbated by the market crash and ongoing crypto winter.

He said that all the money fronted by investors in late 2021 and early 2022 is gone.

The trustee noted that they still needed to receive supporting evidence of the trades after requesting proof of transactions and bank statements.