Tracking cryptocurrency crime: What is the key to traditional investigative methods?
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In the first two episodes of our series on fraud and money laundering, we spoke to blockchain intelligence analysts and experts in currency flows to understand the various forms of international blockchain financial crime. In this episode, we turn our focus back to Taiwan to explore the common criminal methods and discuss how we can establish a healthier cryptocurrency ecosystem.
️ Further reading:
【Web3 Go West】From national intelligence to blockchain intelligence analysis! TRM Labs analyst: Must win the fraud group in the technology race
Prosecutor Luo Wei-yuan from the Taipei District Prosecutors’ Office, who has been responsible for investigating major financial crimes, attended a seminar in the United States in 2019 along with Prosecutor Hong Min-chao, who appeared on the previous episodes of the series on fraud and money laundering. There, they were exposed to discussions related to cryptocurrency, which sparked Luo’s interest in researching cryptocurrency crime.
Today, Prosecutor Luo Wei-yuan is an expert in virtual currency investigations and compliance, holding multiple licenses from internationally renowned blockchain analysis company TRM Labs. He is often invited to give lectures by the Anti-Money Laundering Office of the Executive Yuan, the National Police Agency, the Judicial Academy, the Judicial Research and Training Institute of the Ministry of Justice, the Taiwan High Prosecutors Office, and law enforcement agencies, where he shares his experiences in cryptocurrency crime and technological investigations.
Prosecutor Luo Wei-yuan (pictured) is now an expert with multiple licenses in virtual currency investigation and compliance from internationally renowned blockchain analysis company TRM Labs.
Prosecutor Luo believes that while using technology to track cryptocurrency crime is important, traditional investigative methods are essential for successfully prosecuting a case. The involvement of victims, money laundering routes, and techniques are all crucial elements in investigating a case. Although transaction flow analysis reports allow us to thoroughly understand how criminal groups attempt to hide their tracks and move funds, the question remains: do these reports hold evidential value in court? Prosecutor Luo stated that although Taiwanese courts are currently unfamiliar with this issue, in the United States, for example, courts invite the creators of transaction flow analysis reports to testify, explaining the methodology behind creating such reports and the significance of each analysis point, in order to determine their evidential value.
In the process of money laundering by fraud groups, an indispensable aspect is the use of “dummy accounts” and “money mules”. With the implementation of the “Temporary Suspension and Immediate Closure of Account Functions for Anti-Money Laundering Law” 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 Use Management Regulations to crack down on fraud groups and money mules, taking strict action against suspicious individuals engaging in illegal activities with cryptocurrencies.
Summary of this episode:
What are the common factors in successfully prosecuting cryptocurrency cases in court?
Reporting fraud cases is not just about preventing others from falling victim, it also increases the chances of recovering the defrauded assets!
Wayne’s prediction: We can expect to see more successful seizures of fraudulently obtained USDT in the future!
Do transaction flow analysis reports have evidential value in court?
How will “individual currency traders” be regulated as the convergence point for fiat and virtual assets?
Series on fraud and money laundering:
Inviting industry experts, we reveal the techniques used by fraud groups and money laundering operations from the perspectives of investigation, money flow tracking, the judicial system, and cryptocurrency exchanges, decoding the common practices of criminals and addressing the challenges of gathering evidence and law enforcement.
Web3 Go West:
Hosted alternately by Wayne Huang and Winston Hsiao, co-founders of XREX Exchange, and Yoyo Yu, Senior Director of XREX’s CEO Office, this series helps you understand the concept of decentralization and gain a multi-dimensional understanding of the Web3 world.
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