Understanding criminogenic features: Case studies of cryptocurrencies based financial crimes

Adelopo, Ismail; Carletti, Rossella; Luo, Xiaojun

Abstract

The primary objective of this paper is to comprehensively examine the intricate relationship between cryptocurrency and criminal enterprises, shedding light on the methods, mechanisms, and implications of cryptocurrency use in various financial crimes. Based on the theory of planned behaviour, this paper conducts a thematic analysis and criminal investigation on 51 cryptocurrency-related financial crime cases to identify criminogenic features of cryptocurrencies, key tools, and features of cryptocurrency-related financial crimes. Based on the case study, policy-changing recommendations and big-data analytics tools are proposed for law enforcement agencies to prevent and combat cryptocurrency crimes. The criminal investigation indicates that the decentralisation, pseudo-anonymity, and borderless nature of cryptocurrencies enable cross-border financial flows and make transaction tracking a complex challenge. Popularity and market capitalisation used to play a dominant role in criminals’ choice of cryptocurrency as Bitcoin was associated with most cryptocurrency-related crimes before 2019. Recently, an increasing number of other cryptocurrencies, such as privacy coins and stablecoins, have been utilised for financial crimes, while cryptocurrencies have also become an essential source of terrorist financing. Therefore, it is important and urgent for cryptocurrency exchange companies, mixing services, and wallet providers to implement strict anti-money laundering and know-your-customer measures to help combat cryptocurrency-related crimes and create a sustainable future for cryptocurrencies. Due to the open access to cryptocurrency transaction data on the blockchain, powerful big-data analytics tools can help law enforcement departments proactively detect cryptocurrency-related crimes and reduce terrorism’ threats to domestic and international security.

• Journal Article Type: Article
• Acceptance Date: Oct 4, 2024
• Deposit Date: Oct 17, 2024
• Print ISSN: 1359-0790
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Keywords: Cryptocurrencies; Financial crime; Case study; Thematic analysis; Criminal investigation; Crime prevention
• Public URL: https://uwe-repository.worktribe.com/output/13291882