Crypto, crime and control

Cryptocurrencies as an enabler of organized crime

EXECUTIVE SUMMARY

Classical economics views money as a functional tool of real economic activity. It facilitates transactions, provides a measure for comparative valuation, a store of wealth and a means of deferred payment. In the licit sphere, money is widely viewed by economists as a ‘veil’, representing no real long-run economic activity in itself. However, in the underworld of illicit economies and organized crime, money is a facilitator of underlying enterprises – drug trafficking, trafficking in human beings, wildlife trafficking, illegal mining, and a number of other criminal activities. Money is part of the process of washing illicit gains into seemingly licit assets and activities, while access to fungible money becomes a scarce commodity. Into this fray emerged cryptocurrencies: a mixture of technological innovation, libertarian pseudo-economics and a mechanism to enable transactions to escape from the regulated financial economy.