Australian law enforcement agency is investigating bitcoin’s role in organized crime, just as politicians and financial regulators embrace the digital currency as a legitimate part of modern business.
Judy Lind, a strategy chief of the Australian Crime Commission, has recently announced that the investigators of the organization are monitoring bitcoin-enabled crime in an operation named Project Longstrike.
“A range of virtual currencies including bitcoin are used as payment methods to facilitate illicit trade on the darknet,” Lind said in a statement. “Virtual currencies can be used anonymously and provide a layer of anonymity in addition to that provided by the darknet.”
The darknet is described as a shady corner of the internet where transactions can be done and information exchanged behind a mask of anonymity. It is popular with criminals purchasing and selling child exploitation material, guns, drugs, hacking techniques and stolen financial information.
According to Judy Lind, Project Longstrike follows operations in 2012 and 2013, which developed technology capable of tracing bitcoin transactions.
In October, police captured Queensland state’s first bitcoin automated teller machine five months after it opened, with media reporting police that it was being used by a former motorcycle gang member to handle crystal methamphetamine.
Regulators around the world are suspicious after the Mt Gox bitcoin exchange listed for bankruptcy in Tokyo earlier this year, saying it lost some 850,000 bitcoins, which is worth about $300 million at current prices, in a hacking attack.
Project Longstrike is just the latest example of Australia’s fortitude to repress bitcoin-enabled crime. Last month it surrendered the alleged primary moderator of Silk Road, a website where people bought illegal drugs using bitcoins, to the United States.
Japan has allowed bitcoin trading to carry on without establishing a full set of rules on its legal status. U.S. authorities are yet to agree to cohesive laws, while the UK has classified bitcoins as a currency.
Australian authorities are also trying to simplify legal bitcoin trades in a country where use of the currency is exploding. Among its 23.6 million people, Australia has an estimated 7% of the $5 billion worth of bitcoins now circulating, with reports of online retailers, real estate agents and even pubs accepting bitcoin payments.
The Australian Taxation Office has released a guide for bitcoin traders on how to declare their investments, and a parliamentary inquiry is trying to strengthen the regulatory framework.
“Politicians singularly fail to understand what (the digital economy) is all about. They latch onto trends and buzzwords,” said David Glance, a director of the University of Western Australia’s Centre for Software Practice, referring to the tax office guidelines and parliamentary inquiry. “There still isn’t a problem that bitcoin solves, other than buying drugs,” he added.
According to Glance, darknet sites including Silk Road and its successor Silk Road 2.0 did about $3 billion of turnover annually in the year to November, equivalent to more than half the total bitcoins now in circulation.
Zhanna has a background working for an American multinational food and beverage company as well as at a number of translation agencies serving similar top multinational corporations. She enjoys discovering new cultures as well as learning new languages. She is also a lover of all things fabric and floral ,especially if they are design-related. Zhanna is a graduate of Belarusian State Economic University with a major in Intercultural Business Communications.