Crime, cryptocurrencies and compliance

Organised crime in Australia is proficient and enduring. It is transnational in nature,
technology enabled and increasingly functions as a business: employing professionals;
outsourcing key activities such as money laundering; diversifying into multiple criminal
markets; and developing strong, consistent revenue streams through involvement in
comparatively low-risk activities.
— Nicole Rose PSM, Acting Chief Executive Officer, Australian Criminal Intelligence Commission

Any discussion of cryptocurrencies, needs to move beyond the speculative appeal of these anonymous and decentralised facilities to consider their practical use. The Australian Criminal Intelligence Commission provides a compelling argument for effective regulation of virtual currencies when they note that "Virtual currencies, such as bitcoin, are increasingly being used by serious and organised crime groups as they are a form of currency that can be sold anonymously online, without reliance on a central bank or financial institution to facilitate transactions."

In addition, the ACIC's report outlines the anatomy of the "cold call investment fraud". While these fraudulent schemes can vary in sophistication, they follow a common path that advisers, and consumers, should learn to recognise. 

Screen Shot 2018-01-21 at 10.07.30 pm.png

The report provides a useful oversight of matters seldom encountered by most compliance professionals. Given our obligation to ensure compliance with the financial services laws, compliance professionals should make more effort to understand the issues with which licensees and advisers can become inadvertently involved.