Cryptocurrencies and Crime: EU Regulatory Needs and Enforcement Strategy

SCHEME: OPEN

CALL: 2017

DOMAIN: LE - Law, Economics, Finance

FIRST NAME: Silvia

LAST NAME: Allegrezza

INDUSTRY PARTNERSHIP / PPP: No

INDUSTRY / PPP PARTNER:

HOST INSTITUTION: University of Luxembourg

KEYWORDS: Virtual CurrenciesBitcoinsCybercrimeRegTech

START: 2018-09-01

END: 2020-08-31

WEBSITE: https://www.uni.lu

Submitted Abstract

The research project intends to contribute to the design of a coordinated supervision and enforcement system to fight against criminal misuse of cryptocurrencies. The European Union is currently debating the possibility to bring virtual currencies within the scope of the EU anti-money laundering and terrorism-financing regime. However, the elaboration of an EU-wide regulatory framework calls into question the actual capacity of the existing enforcement structures, networks and tools to effectively detect, investigate and sanction crimes perpetrated by means of cryptocurrencies. The question is even more crucial given the borderless character of the breakthrough technology at stake. While criminal enforcement is a matter that is characterized by fragmentation along national borders, providers of cryptocurrency services operate internationally through the Internet. This calls for enhanced cooperation and coordination at international level. Moreover, cryptocurrencies are designed in a way that conceals the identity of their users and thereby the identification of perpetrators. Thus, a successful fight against criminal misuse of cryptocurrencies calls for reflection not only on the structure of enforcement mechanisms, but also on the appropriateness and effectiveness of their tools. To this end, the study will regroup an international consortium of highly specialized experts in the field (coming from Luxembourg, the United Kingdom, the United States, Germany and Singapore) to analyse the design of a consistent supervision and enforcement system to fight against criminal misuse of cryptocurrencies.

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