lynx   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eme/jmlcpp/jmlc-05-2020-0060.html
   My bibliography  Save this article

Cryptocurrencies and financial crime: solutions from Liechtenstein

Author

Listed:
  • Fabian Maximilian Johannes Teichmann
  • Marie-Christin Falker
Abstract
Purpose - The purpose of this paper is to illustrate how cryptocurrencies are being used as a vehicle for financial crime (such as money laundering, terrorist financing and corruption) and propose a more effective international standard for regulation that uses the Liechtenstein blockchain act as a benchmark. Design/methodology/approach - This paper investigates how cryptocurrencies facilitate financial crime through a qualitative study consisting of interviews with 10 presumed providers of illegal financial services and 18 international compliance experts. Findings - This study shows that cryptocurrencies are a highly suitable vehicle for money laundering, terrorist financing and corruption and that current compliance efforts in the cryptocurrency sector are ineffective. Research limitations/implications - The presented findings illustrate that for a more effective combat of financial crime via cryptocurrency, an international standard for blockchain and cryptocurrency regulation must be created. This paper suggests that Liechtenstein’s innovative and comprehensive blockchain act could be used as a basis for said standard. Practitioners should also consider cooperating transnationally when prosecuting financial crime via cryptocurrency. Originality/value - The fact that cryptocurrencies facilitate financial crime is widely known. However, this study combines the perspectives of both compliance experts and presumed criminals to gain a comprehensive understanding of the techniques that money launderers, terrorist financiers and corrupt public officials use. This paper examines the potential for the innovative Liechtenstein blockchain act, which has, thus, far not received empirical attention, to set the benchmark for international regulations.

Suggested Citation

  • Fabian Maximilian Johannes Teichmann & Marie-Christin Falker, 2020. "Cryptocurrencies and financial crime: solutions from Liechtenstein," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 24(4), pages 775-788, June.
    • Handle: RePEc:eme:jmlcpp:jmlc-05-2020-0060
    DOI: 10.1108/JMLC-05-2020-0060
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JMLC-05-2020-0060/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JMLC-05-2020-0060/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/JMLC-05-2020-0060?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Sean Foley & Jonathan R Karlsen & Tālis J Putniņš, 2019. "Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1798-1853.
    2. Yhlas Sovbetov, 2018. "Factors Influencing Cryptocurrency Prices: Evidence from Bitcoin, Ethereum, Dash, Litcoin, and Monero," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 2(2), pages 1-27.
    3. Dennis B. Desmond & David Lacey & Paul Salmon, 2019. "Evaluating cryptocurrency laundering as a complex socio-technical system," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 22(3), pages 480-497, July.
    4. Perri Reynolds & Angela S.M. Irwin, 2017. "Tracking digital footprints: anonymity within the bitcoin system," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 20(2), pages 172-189, May.
    5. Anita Lavorgna, 2015. "Organised crime goes online: realities and challenges," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 18(2), pages 153-168, May.
    6. Alice Hutchings & Thomas J. Holt, 2017. "The online stolen data market: disruption and intervention approaches," Global Crime, Taylor & Francis Journals, vol. 18(1), pages 11-30, February.
    7. Giorgio Merlonghi, 2010. "Fighting financial crime in the age of electronic money: opportunities and limitations," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 13(3), pages 202-214, July.
    8. Victor Dostov & Pavel Shust, 2014. "Cryptocurrencies: an unconventional challenge to the AML/CFT regulators?," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 21(3), pages 249-263, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mohammad Alqudah & Luis Ferruz & Emilio Martín & Hanan Qudah & Firas Hamdan, 2023. "The Sustainability of Investing in Cryptocurrencies: A Bibliometric Analysis of Research Trends," IJFS, MDPI, vol. 11(3), pages 1-25, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dennis B. Desmond & David Lacey & Paul Salmon, 2019. "Evaluating cryptocurrency laundering as a complex socio-technical system," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 22(3), pages 480-497, July.
    2. Nasir Sultan & Norazida Mohamed & Mervyn Martin & Hafizah Mohd Latif, 2023. "Virtual currencies and money laundering: existing and prospects for jurisdictions that comprehensively prohibited virtual currencies like Pakistan," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 27(2), pages 395-412, May.
    3. Helder Sebastião & Pedro Godinho, 2021. "Forecasting and trading cryptocurrencies with machine learning under changing market conditions," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-30, December.
    4. Marcus Smith & Milind Tiwari, 2023. "The implications of national blockchain infrastructure for financial crime," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 31(2), pages 236-248, June.
    5. Shaen Corbet & Les Oxley, 2023. "Investigating the Academic Response to Cryptocurrencies: Insights from Research Diversification as Separated by Journal Ranking," Review of Corporate Finance, now publishers, vol. 3(4), pages 487-528, September.
    6. Laura Alessandretti & Abeer ElBahrawy & Luca Maria Aiello & Andrea Baronchelli, 2018. "Anticipating cryptocurrency prices using machine learning," Papers 1805.08550, arXiv.org, revised Nov 2018.
    7. Laura Alessandretti & Abeer ElBahrawy & Luca Maria Aiello & Andrea Baronchelli, 2018. "Anticipating Cryptocurrency Prices Using Machine Learning," Complexity, Hindawi, vol. 2018, pages 1-16, November.
    8. Élise Alfieri & Yann Ferrat, 2022. "The larger compensation for miners, the higher positive effect on the financial performance of cryptocurrencies [Une meilleure rémunération des mineurs : un effet positif sur la performance financi," Post-Print hal-03670074, HAL.
    9. José Campino & Ana Brochado & Álvaro Rosa, 2021. "Initial Coin Offerings (ICOs): the importance of human capital," Journal of Business Economics, Springer, vol. 91(8), pages 1225-1262, October.
    10. Hanna Halaburda & Guillaume Haeringer & Joshua Gans & Neil Gandal, 2022. "The Microeconomics of Cryptocurrencies," Journal of Economic Literature, American Economic Association, vol. 60(3), pages 971-1013, September.
    11. Goodell, John W. & Goutte, Stephane, 2021. "Co-movement of COVID-19 and Bitcoin: Evidence from wavelet coherence analysis," Finance Research Letters, Elsevier, vol. 38(C).
    12. Eugene Msizi Buthelezi, 2024. "Navigating Global Uncertainty: Examining the Effect of Geopolitical Risks on Cryptocurrency Prices and Volatility in a Markov-Switching Vector Autoregressive Model," International Economic Journal, Taylor & Francis Journals, vol. 38(4), pages 564-590, October.
    13. Marco Lambrecht & Andis Sofianos & Yilong Xu, 2025. "Does Mining Fuel Bubbles? An Experimental Study on Cryptocurrency Markets," Management Science, INFORMS, vol. 71(3), pages 1865-1888, March.
    14. Binh Nguyen Quang & Thai‐Ha Le & Canh Nguyen Phuc, 2022. "Influences of uncertainty on the returns and liquidity of cryptocurrencies: Evidence from a portfolio approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2497-2513, April.
    15. Panagiotis Anastasiadis & Stephanos Papadamou, 2022. "The dimension of popularity in the cryptocurrency market," SN Business & Economics, Springer, vol. 2(5), pages 1-15, May.
    16. Anil Donmez & Alexander Karaivanov, 2022. "Transaction fee economics in the Ethereum blockchain," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 265-292, January.
    17. Naqbi, Shaikha Ali Al & Nobanee, Haitham & Ellili, Nejla Ould Daoud, 2025. "Global trends and insights into cryptocurrency-related financial crime," Research in International Business and Finance, Elsevier, vol. 75(C).
    18. Erdogan Kaygin & Yunus Zengin & Ethem Topcuoglu & Serdal Ozkes, 2021. "The Evaluation of Block Chain Technology within the Scope of Ripple and Banking Activities," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 10(3), pages 153-167.
    19. Raphael Auer, 2019. "Beyond the doomsday economics of "proof-of-work" in cryptocurrencies," BIS Working Papers 765, Bank for International Settlements.
    20. Jason Scharfman, 2022. "Additional Crypto Operations and Compliance Topics," Springer Books, in: Cryptocurrency Compliance and Operations, edition 1, chapter 0, pages 205-221, Springer.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jmlcpp:jmlc-05-2020-0060. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.
    Лучший частный хостинг