Cryptocurrency: Police Hunt Wallets, Not Money Laundering

There are opportunities for money laundering through illegal cryptocurrency transactions done by this one Stop Bee at different times, but the police were unable to launch such an investigation against them due to a lack of required technological support and expertise.

Law enforcement has already identified cryptocurrencies as a new means of money laundering and illegal financing. They also learned that these illegal virtual coins are used for online gambling, gambling, terrorist financing, etc.

Over the past five years, various police units have conducted at least 15 operations and arrested at least 27 people in connection with the bitcoin trade, according to sources from various police units.

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When it comes to investigating such cases, they have only identified their digital wallets and charged them under the Digital Security Act.

Information about cryptocurrency transactions remains secure through the blockchain network. A blockchain is a type of digital ledger consisting of a growing list of records, called blocks, that are securely linked using unadulterated cryptography.

Depending on their identity, two internet users can trade directly in virtual currencies themselves. With the opening of a 2734 an internet account and a digital ID, they can perform virtual transactions.

The police have so far filed a report in four of the nine cases. The remaining five cases are pending as they have not yet received forensic reports.

In May last year, the Rapid Action Battalion arrested a racket of 12 bitcoin traders, a mastermind, in Uttar Badda in Dhaka in connection with illegal bitcoin transactions and also seized 29 computers, mobile phones and other documents.

Their kingpin Ismail Hossain Sumon operated a bitcoin company under the guise of online outsourcing. He employed 32 people to maintain the illegal trade

The RAB then said it is the largest bitcoin trading group in Bangladesh and that anything related to illegal transactions will come to light after a thorough investigation to find evidence of money laundering, if any.

The Criminal Investigation Department (CID) was later commissioned but was able to complete the investigation despite a year.

Those involved say the investigation has made no progress as the forensic report of the seized digital devices has not reached them.

The RAB had also arrested Raihan Hossain, 29, in January 2021, a suspected mastermind behind an illegal bitcoin operation, from Gazipur. The RAB claimed that Raihan was the most skilled among the bitcoin traders.

There is a great chance of money laundering by him, the detectives were unable to investigate this either.

Seeking anonymity, an official involved in the police investigation told TBS: “We have no expertise in bitcoin-related technologies. Therefore, we cannot do a proper investigation.

Unless they are given the necessary training and equipment, neither the investigation nor the investigation will accelerate, he said.

In some cases, the police only start investigating after becoming aware of cryptocurrency traders’ virtual wallets.

In 2019, a Bogura cyber police team arrested two people for their alleged involvement in cryptocurrency transactions. The investigation of the case was later concluded after their digital wallet was found.

An officer involved in the investigation of the case told TBS that they have been trading bitcoin for a long time. Initially, the investigation found information about transactions over 1 crore Tk1 and on the basis of this, the complaint was filed.

“If we inquired about their mobile banking and other matters, we would know if anyone else transacted through them or if other groups are involved,” he said.

Cryptocurrency training planned but not yet implemented

Earlier this year, the Interior Ministry sent a letter to police headquarters based on a report from a cryptocurrency intelligence agency. In the letter, the government ordered the cyber unit of the police and members of the intelligence service to acquire technical skills through training and the purchase of modern equipment and software.

The letter also recommended training members of law enforcement agencies, financial institutions and relevant ministries on modern information and knowledge related to bitcoin technology.

At the time, relevant police officials said CID officials had several meetings with Interpol and: the Federal Bureau of Investigation to monitor crimes through cryptocurrencies. They will provide basic training to control these crimes.

However, no monitoring equipment has been purchased yet because it is very expensive. Apart from this, South Korea will train the police and other law enforcement agencies for three years to control crime through the dark web and cryptocurrency. This training will start this year.

Police headquarters has not taken any action so far, although Interior Ministry guidelines have placed importance on the control of six types of crime, including money laundering.

Experts suggest involving experts in such an investigation

dr. BM Mainul Hossain, an associate professor at the Institute of Information Technology, University of Dhaka, told TBS that to prevent illegal transactions involving media such as bitcoin, the police should form a separate team with competent people in these areas.

Or, those conducting money laundering investigations should receive the necessary training and material support, he said.

Police are now ending their investigation immediately after identifying the trading portfolios. There is no way to avoid responsibilities because they lack the necessary skills.

They should continue investigations with the help of those who are experts in these matters, he noted.

No cryptocurrency decision in five years

In 2017, the Bank of Bangladesh issued a circular asking everyone to refrain from trading virtual currencies. Such transactions would not be allowed as they could violate the Money Laundering Prevention Act and the Anti-Terrorism Act.

But in the meantime, discussions have taken place between bodies that don’t want to reject cryptocurrencies altogether.

For example, the Department of Information and Communication Technology drew up a National Blockchain Technology Strategy in March 2020.

In the strategy paper, the division said $23 billion has been invested in blockchain startups since 2013. This investment may increase further in the future.

“This is an opportunity for the Bengali software industry. But since the use of cryptocurrency is not allowed, the software industry in Bangladesh is missing it,” he said.

However, according to the strategy paper, in the absence of appropriate technological, legal and policy frameworks, these areas could pave the way for terrorist activity in the country. It is therefore essential to think about how to deal with this.

Moreover, while investigating a case last year, the CID asked Bangladesh Bank’s opinion on cryptocurrencies. In response, the central bank said that even if the ownership, storage or transactions of cryptocurrencies are not recognized, trading them cannot be considered a crime.

Transactions in virtual currencies can lead to second-degree violations under the Foreign Exchange Regulation Act 1947, the Prevention of Money Laundering Act 2012, and the Anti-Terrorism Act 2009 .

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