Making crypto conventional by improving crypto crime investigations worldwide

When times are tough — as in the pandemic — enterprising human nature goes into overdrive. People seek out alternative ways to make money. That could be one of the reasons why cryptocurrencies skyrocketed in popularity in the last few years, driven in part by large numbers of people sitting at home wondering how to beat low-interest rates and rising inflation.

Where there’s cash, however, there are also criminals. Bad actors are experts in human behavior and see building momentum and increased crypto traffic as a huge opportunity, knowing that many newer investors may not do their homework. Investors might not apply the same level of scrutiny to crypto as they would their pensions or other investments, and there’s not a lot of regulatory oversight globally. So, a simple splash page or message on a forum can quickly lead a lot of new investors to fall into scams.

We’ve also seen an increased proliferation of scams connected to the pandemic such as pretending to sell fraudulent medicines, vaccines or testing, or offer business loans and grants, for instance, have a crypto element, and law enforcement is having to turn on a dime to react to these new threats. That, in turn, creates a growing headache for policymakers tasked with protecting consumers. We also hear loud and clear from the crypto industry that regulation often feels behind the curve and not fit for purpose.

What’s needed is better education. Better education at every level, from teaching and educating law enforcement to policymakers and regulators. Knowledge sharing across the crypto ecosystem to support investigations. And, the resources and appetite for creating smarter regulation that will both protect consumers and give the industry the clarity it needs to continue to innovate and flourish.

Education will make crypto finally come of age

Crypto can’t become conventional without wider awareness and understanding. The industry tells us that governments and regulators always seem six steps behind when trying to restore control over chaos rather than taking a longer-term and less myopic view on policymaking. That was a big part of my role at the FBI, helping law enforcement to have even a basic understanding of crypto. And, we’re still battling for better education. We have been lending our expertise to help regulators and governments get up to speed on that shifting and rapidly innovating industry to create relevant and effective policy. Because without awareness, knowledge and understanding, crypto may be widely known for crime over legitimacy for some time to come.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Mike Welsh is director of government affairs at Merkle Science and is responsible for relationships with international government entities, providing training, operational and technical insights to regulators and law enforcement so they may seamlessly fold cryptocurrency crimes into financial investigations and collaborate with other agencies. Previously, Mike spent eight years with the FBI, specializing in complex financial crimes and opioid diversion. After that, Mike led Chainalysis’ early efforts into the public sector, assisting in government liaison and operations.