• Michael Bacina

Australian Federal Police form crack crypto unit

The Australian Financial Review are reporting that the Australian Federal Police have formed a crack crypto investigative unit to improve police capabilities to deal with crypto-assets forming part of seized assets and to investigate money laundering and other crimes which have involved crypto-assets.

The AFP's criminal asset confiscation taskforce was established in February 2020, and since that time it has blown past it's goal of seizing AUD$600M of assets by the end of 2024, reportedly having seized to date:

[AUD]$380 million in residential and commercial property, [AUD]$200 million in cash and bank accounts, and [AUD]$35 million in cars, boats, aircraft, artworks, luxury items and cryptocurrencies.

Without their own segment we don't know just how much in the way of crypto-assets have been seized, but that alone demonstrates what a small component of criminal asset seizures involve any meaningful amounts of crypto-assets (well below 5% of seized assets). Given their highly technical nature, it's only sensible that the AFP have a dedicated team which can be trained on and understand crypto, and can use leading tools like Chainalysis and Elliptic to track transactions and catch criminals foolish enough to use an immutable record of transactions for their ill gotten gains. This aligns with Chainalysis reports that only 0.15% of crypto transactions by volume involve illicit actors in 2021. This is of course around 4 times the level of illicit transactions identified in the banking system, a point which AUSTRAC has raised as a warning sign, but a tiny fraction of the estimated illicit transactions involving cash (which are estimated between 4-8%

As cryptocurrencies increasingly become mainstream, driven in part by the rapid growth in the NFT space as well as a potential thawing of crypto-winter, better education amongst law-enforcement is key to ensure that criminals are brought to justice, and long tired tropes about crypto being used only by criminals is put to rest.