As we head towards the end of 2023, we have seen INTERPOL continue its trend of focusing on measures to enhance its abilities to fight transactional financial crime.
More specifically, in light of recent high-profile criminal cases, we have seen INTERPOL continue to focus and develop its expertise towards investigating allegations involving cryptoassets as they become more mainstream and ubiquitous.
Background
Throughout 2022, we published a series of blogs highlighting significant INTERPOL news and announcements that we anticipated would provide a steer towards the priorities INTERPOL would be focussing on as the year played out.
Ultimately, it was clear from the blogs that INTERPOL would continue to focus on enhancing transnational financial crime fighting abilities.
Specific measures and initiatives discussed included the launch of INTERPOL's Financial Crime and Anti-Corruption Centre and a joint initiative with the Financial Action Task Force to assist coordinating cross-border efforts to recover illicit assets and deprive criminals of their ill-gotten gains.
As cryptoassets play an increasingly prominent part in various aspects including finance (and financial crime), it was perhaps unsurprising to find cryptoassets featuring in a significant part of some of INTERPOL's announcements in 2022.
These included INTERPOL announcing that they were developing a specialist cryptoasset team to coordinate globally against digital asset crime. INTERPOL additionally announced that they were entering the Metaverse.
As crimes involving cryptoassets became more frequent, we also examined the use of INTERPOL measures to pursue those alleged to have been involved in allegations concerning cryptoassets.
INTERPOL and 2023
As such, as we move towards the end of 2023, we have continued to see INTERPOL focus on coordinating a global fight against financial crime. This has included an increased focus on investigations concerning allegations involving offences featuring cryptoassets.
In the aftermath of the collapse of crypto exchange FTX and the subsequent investigation, this will certainly be the year where investigators and regulators will place cryptoassets under increased regulatory and criminal scrutiny. This could include investigations with a global span which involve the assistance of INTERPOL.
Accordingly, those who are concerned that they may have outstanding liability should seek expert legal advice.
We now look back again over the significant INTERPOL developments in 2022.
2022 INTERPOL significant developments
March 2022 – Individuals and corporates beware – INTERPOL enhances transnational financial crime fighting capabilities
In March 2022 we wrote about how the launch of INTERPOL's Financial Crime and Anti-Corruption Centre ("IFCACC") should result in much more sophisticated international information-sharing. We noted that this will make it easier for INTERPOL member countries to investigate, locate, and potentially bring to justice through INTERPOL those alleged to have committed financial crimes.
This followed an earlier December 2021 blog, entitled "Individuals and corporates beware – Financial issues, international cooperation and the Middle East". This blog described how enhanced information- and evidence-sharing could lead to increased scrutiny and wider law enforcement ability to investigate both individuals and corporates alleged to be conducting illicit financial activities.
May 2022 – What is being discussed at the latest INTERPOL European Regional Conference?
In May 2022, we noted that for the first time since 2019, the INTERPOL European Regional Conference enabled over 120 senior police officials from 50 countries to meet and discuss issues such as INTERPOL's assessment on crime threats and trends, and enhanced information-sharing and investigation capabilities.
Crime linked to conflict in Ukraine
We also noted that there was a reference made to an increase in crimes linked to the conflict, including an increase in financial and cybercrime, such as online scams, phishing and malware development. Further, price rises in fertiliser and pesticides have resulted in increasing counterfeiting.
Launch of INTERPOL's Financial Crime and Anti-Corruption Centre briefing
Finally, we noted that there was a briefing on the launch of INTERPOL's Financial Crime and Anti-Corruption Centre ("IFCACC"). As has been previously discussed, this should result in much more sophisticated international information-sharing. This will surely also make it easier for INTERPOL member countries acting through INTERPOL to investigate, locate, and potentially bring to justice those alleged to have committed financial crimes.
Indeed, it was reported that IFCACC has already intercepted millions of Euros and is providing assistance to law enforcement agencies across the world.
Mention was also made of the recent launch of the Frontex INTERPOL Electronic Library Document System, which provides visual markers that can indicate a counterfeit of a forged document.
September 2022 – INTERPOL and The Financial Action Task Force launch joint initiative
In September 2022, we wrote that INTERPOL and The Financial Action Task Force ("FATF") had recently launched a joint initiative to assist global coordinated cross-border efforts to recover illicit assets and deprive criminals of their ill-gotten gains.
Background
We described how a 13 September 2022 FATF publication details how the first ever INTERPOL and FATF roundtable event gathered together more than 150 high-level experts. According to the publication, some of the issues discussed included the need to:
Promote national policies and actions that prioritise the tracing, seizure and confiscation of criminal assets.
Enhance operational cooperation at the national, regional and international levels; and
Increase effective information-sharing among public authorities and with the private sector.
As the publication makes clear, in an age when stolen assets are often moved abroad and quickly channelled through multiple jurisdictions, rendering the process of asset recovery complex, this initiative will certainly go some way to prioritising cross-border tracing, seizure and confiscation of criminal assets.
Increasing attempts to tackle global fraud and assist asset recovery
In addition, Gherson's criminal litigation, investigations and regulatory team have previously written about how INTERPOL had also recently launched a worldwide crackdown on social engineering fraud.
We observed how this has resulted in hundreds of individuals being arrested and millions seized. This operation demonstrates how INTERPOL could play an increased part in these types of operations going forwards.
Finally, we also discussed the launch of INTERPOL's Financial Crime and Anti-Corruption Centre ("IFCACC"). As has been previously discussed, this should result in much more sophisticated international information-sharing. We informed that this will also make it easier for INTERPOL member countries acting through INTERPOL to investigate, locate, and potentially bring to justice those alleged to have committed financial crimes.
September 2022 – Crypto and INTERPOL – can INTERPOL issue a Red Notice in relation to allegations involving crypto?
In September 2022, we wrote about reports that South Korea had asked INTERPOL to issue a Red Notice for developer Do Kwon, who is the founder of the failed crypto currency Terra. An INTERPOL Red Notice can be used to prevent an individual fleeing prior to an extradition request being issued.
We also described further reports that the reason for this request is that Do Kwon had refused to cooperate with an investigation into the collapse of Terraform Labs, which is the company behind the failed cryptocurrency Terra. According to a 19 September 2022 article by the Guardian, "Kwon's attempts to build an "algorithmic stablecoin" that would retain its value at exactly $1 without any reserves underpinning it failed catastrophically in spring 2022, wiping out more than $80bn (£70bn) of value as the tokens were sold by panicky holders".
October 2022 – Crypto and INTERPOL – INTERPOL develops specialist cryptoasset team to coordinate globally against digital assets crime
In October 2022 we reported that INTERPOL announced during a recent press conference before its 90th generally assembly that it has formed a specialist team to help countries combat crimes involving cryptoassets.
As we had previously written about, there have been increasing reports of countries using INTERPOL to pursue individuals alleged to have been involved with criminality concerning cryptoassets.
Suitability of INTERPOL
We argued that given the decentralised and borderless nature of some cryptoasset transactions, an organisation with global reach such as INTERPOL would lend itself very well to help to coordinate the steps required to assist in both pursuing individuals alleged to have been involved with criminal offences involving crypto, and also in tracing any associated proceeds of crime.
Indeed, as Jurgen Stock, INTERPOL's Secretary General noted "Huge developments in technology, internet of everything and digitalization – because of cryptocurrency – pose a challenge to law enforcement, because, very often, they (agencies) are not properly trained and properly equipped from the beginning".
As always, there would be a need to ensure that INTERPOL was always used in compliance with all its applicable rules and regulations.
November 2022 – Crypto and INTERPOL Part 2 – INTERPOL enters the Metaverse
Furthering the theme of keeping track with technological developments and all things digital, in November 2022, we noted that INTERPOL had also announced the unveiling of the first ever Metaverse specifically designed for law enforcement agencies worldwide.
As technology breaks down the barriers, crime increasingly moves online and we move into a more-digital world, law enforcement will need to keep up. An organisation with expansive reach and connections such as INTERPOL is well-geared to face the changes in crime brought about by technological developments.
This was in light of INTERPOL's research showing that crime has increasingly moved online. The report ponders how law enforcement can enhance their awareness of threats, but also harness opportunities as the boundaries of our physical world move into a digital borderless world.
Indeed, INTERPOL note how criminals are already starting to exploit the Metaverse and that as the use of technology grows, crimes such as money laundering, financial fraud and counterfeiting will undoubtedly increase.
As Madan Oberoi, INTERPOL's Executive Director of Technology and Innovation, observes: "By identifying these risks from the outset, we can work with stakeholders to shape the necessary governance frameworks and cut off future criminal markets before they are fully formed".
Finally, we noted that compared to the Metaverse, crypto is just the tip of the iceberg.
As always, there would be a need to ensure that INTERPOL was always used in compliance with all its applicable rules and regulations. The applicability of these rules and regulations as we enter a virtual world will need to be kept carefully under review.
INTERPOL, Red Notices, crypto, the Metaverse and 2023!
Those who fear that a jurisdiction may have requested INTERPOL to process data relating to them in connection with any allegations of offences involving crypto, or even in the Metaverse, or are just concerned about potential liability, should get in contact.
Indeed, Gherson Solicitors LLP continue to receive requests for expert advice and assistance from those who fear they may have outstanding financial issues arising. That advice tackles:
- How to best approach a possible INTERPOL red notice;
- Preparing for potential criminal proceedings / an extradition request;
- Preparing for a situation where a civil matter or commercial dispute could be used to initiate bogus criminal proceedings; and
- Exploring the possibility of instigating civil litigation proceedings to recover any misappropriated assets.
Gherson have previously written a series of blogs designed to assist those who fear they might be subject to INTERPOL measures (including a Red Notice):
INTERPOL and Red Notice Challenges
How to Remove an INTERPOL Red Notice
INTERPOL Red Notices and Extradition
How do I know if I am subject to an INTERPOL Red Notice
Regulation and compliance
In these constantly changing times, firms that deal with cryptoassets, and additionally have exposure to firms that do, will need to carefully consider all their systems and controls to ensure that they are able to comply with all relevant AML and sanctions regulations.
Gherson's white-collar crime and regulatory team are able to provide advice and assistance with AML and sanctions compliance, including in situations involving cryptoassets.
Additionally, the team has recently started a series on the regulation of crypto, with the aim of advising those who work in the compliance of this sector. In addition, for those who would like advice on relevant issues, including those who have had issues with the FCA registration process, our specialist regulatory and compliance team can guide individuals and companies through the process.
Originally Published 23 November 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
