Research pioneered by Melbourne’s RMIT University has uncovered damning truths concerning the underlying causes that drive cryptocurrency-related criminal activities.
Through this research, RMIT systematically reviewed 59 criminal cases involving Bitcoin and other cryptocurrencies in Australian courts between 2013 and 2022.
Study Lead and Senior Lecturer at RMIT Dr Aaron Lane revealed that almost 80 per cent of the cases involved allegations of drug offences, ranging from minor possession to more serious importation and commercial trafficking charges.
“In the cases where Bitcoin or another cryptocurrency was relevant to the offending, it was generally used as a means of payment for illicit goods,” he mentioned.
Dr Lane suggested that the use of cryptocurrencies was a contributing factor in the imposition of harsher sentences in many of the cases.
“Our study finds that the use of cryptocurrency in the commission of a criminal offence is seen by courts as a factor that indicates the sophistication or seriousness of the offence.”
Co-Author and Associate Lecturer at RMIT’s Graduate School of Business and Law Lisanne Adam said perceptions that Bitcoin and other cryptocurrencies were associated with sophisticated criminal behaviour were not an uncultured opinion.
“One reason for this is that cryptocurrency is the only method of payment on dark web marketplaces, and sentencing judges are keen to send a message to deter potential offenders,” she said.
The University’s research uncovered that the use of cryptocurrency assets is an attractive currency to criminals because the technology facilitates seamless global transfers without the friction of the traditional banking system.
Law enforcement agencies in Australia have developed expertise in dealing with cryptocurrencies to some extent, however, the majority of offenders are still caught using traditional policing methods, such as intercepting packages or phone calls.
Despite efforts to curb crypto-related crimes, RMIT research showed that numbers have only continued to grow throughout the years.
In 2013, only one case involving cryptocurrency was reported, whereas, in 2020 the number of cases rose to 46.
Today, an estimated 1 million Australians now hold a cryptocurrency account.
Leading provider of market and consumer data, Statista, furthers this by explaining that the crypto market has rapidly developed in recent years, and this is reflected in increasing trading volumes on exchanges and a significant spike in the daily active uses of cryptocurrency wallet apps.
The use of cryptocurrencies is more common in the younger generation, with Bitcoin trading as the main contender.
RMIT warns that mass adoption will lead to negative implications for the courts and the wider legal profession as future cases are likely to become more complex.
In many of the sentencing decisions, there is little, if any, consideration given to the type of cryptocurrency transactions being made, which RMIT said is cause for concern.