The Cryptocurrency Industry Is Now The Breeding Ground For Money Exploitation

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Russia has been using cryptocurrency to buy weapons utilised for the Ukraine conflict.

Australia’s financial intelligence agency has warned that Russian paramilitary groups are soliciting cryptocurrency to buy weapons and claims Australians have donated to terrorist organisations abroad.

According to John Moss, Austrac’s  deputy chief executive and head of intelligence, “We are now seeing more traditional money laundering being displaced into cryptocurrency, particularly to send money offshore.”

He referred to crypto as the “standard part of money laundering tool kit” for well-planned crime groups in Australia.

Russia uses a fundraising scheme posted on social media to gather funds. Last July, Chainalysis’ global consultants found out a $2.2m chunk of cryptocurrency was wired for Russian paramilitary groups to buy their arms.

“This shows how easy it is to use crypto as a fundraising source, and when you mix it with social media, you get a big reach. You’ve got a technology that’s easy to use, and if you’re flexible in the type of cryptos you take, you can do quite well out of it,” Moss stated.

Moss also expressed alarm over the fact that criminals use an increasing number of regulated crypto-ATMs.

“These machines are not seen in places like the UK. When you look at the reporting, you see lots of fraud victims. Very vulnerable people putting large amounts of cash into these ATMs, which is essentially immediately gone offshore,” Moss said.

On the other hand, Michael Tink, intelligence operations national manager of Austrac, debunked the scenario. Tink said that crypto-fundraising in Australia is small.

“We have seen evidence of Australians sending money to offshore cryptocurrency accounts linked to al-Qaida, linked to Isil, and this is largely organisational support for travel, training, the salaries of fighters and uniforms,” Tink said.

“It doesn’t take a lot of money to have an impact on a terrorist organisation in a conflict zone, and small amounts of money can buy weapons and result in attacks, so it’s still a significant risk.”

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