Australian Federal Police forms cryptocurrency unit to hit criminals

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“It’s targeting assets, but it’s also providing that valuable, investigative tracing capability and lens for all of our commands across all of our businesses, whether they’re national security-related, child protection, cyber – or the ability to trace cryptocurrency transactions across the relevant blockchains is really, really important.”

AFP Commissioner Reece Kershaw established the criminal asset confiscation taskforce in February 2020 with the goal of restraining $600 million in proceeds of crime by the end of financial year 2024.

Stefan Jerga from the Australian Federal Police. 

Since February 2020, the AFP has seized $380 million in residential and commercial property, $200 million in cash and bank accounts, and $35 million in cars, boats, aircraft, artworks, luxury items and cryptocurrencies.

Mr Jerga said the AFP has not received more power to seize assets but renewed its focus on hitting criminals where it hurts when closing out enforcement actions and this had driven better-than-expected outcomes.

“You’ve got to be attacking the wealth and the business models of organised crime, as well as trying to disrupt and arrest,” he said.

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He said while the crypto gains seized were small compared to “traditional” criminal assets such as property and cash, the additional focus was able to provide great intelligence insights.

The new unit comes after AUSTRAC deputy chief executive John Moss said in April that cryptocurrencies could be used anonymously, quickly and across international borders, which made them “attractive for criminals” including neo-Nazi groups. He said “as cryptocurrencies become increasingly part of the everyday financial ecosystem … criminals continue to adapt and find new ways to exploit emerging technologies”.

AFP deputy commissioner investigations Ian McCartney said the force was stepping up efforts to stay relevant in a changing landscape.

Agile response needed

“The criminal environment today is highly complex and requires an agile and far-reaching response from law enforcement. This strategy, which is delivering a maximum impact on the criminal environment, is despised by organised crime,” Mr McCartney said.

Mr Jerga said the AFP had also successfully recovered more than $10 million from National Disability Insurance Scheme fraud, after an investigation revealed criminal rings were rorting the system.

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“We’ve been very active working with the NDIA and Services Australia and other partners in terms of trying to counter that NDIS fraud and hold people to account,” he said.

“These are not victimless crimes. Fraud against the government undermines the government’s ability to deliver services and support to Australians.”

But he said the bigger focus would be on preventing fraud in the front end of the system rather than recovering the proceeds. “Hopefully, they’re not calling upon us as much as we could otherwise be because we’re going to be holding people to account at the front end,” he said.

The recovered monies are held by the Australian Financial Security Authority in the government’s confiscated assets account.

Mr Jerga said proceeds go into online child safety programs, the DNA for the missing persons project, the wastewater analysis program, the Daniel Morcombe Foundation, Cowards Punch initiative and other community initiatives such as Crimestoppers.