A bench of the Supreme Court observed last week that the crime of money laundering is a “more serious and heinous crime than murder” because it hampers the whole economy.
Even non-fungible tokens (NFTs) are now subject to money laundering. According to a report by Blockchain data platform Chainalysis, a small but growing portion of activity in NFT markets could be attributed to money laundering.
“Although money laundering in physical art is difficult to quantify, we can make more reliable estimates of NFT-based money laundering thanks to the inherent transparency of Blockchain,” the report said last week. .
According to legal and cyber-rights experts, the crypto ecosystem is becoming a breeding ground for cybercriminals.
“This is so because these crypto-assets and cryptocurrencies are all Blockchain-based and hence are now widely used on the Dark Web to perpetuate various cybercriminal activities,” said Dr. Pavan Duggal, a seasoned Supreme Court lawyer. and a cyber law expert, told IANS.
Bitcoin and other cryptocurrencies have become the de facto currency on the Dark Web.
The use of crypto assets and cryptocurrencies actually presents a very difficult situation for law enforcement to trace the attribution of a particular cyber act from the Dark Net.
“All of this blockchain-enabled technology is going to present an enormous amount of challenges for nations, including India,” Duggal said.
While clarifying taxation regarding digital assets, the lack of a detailed Crypto Bill makes the overall situation even more difficult to assess, especially when it comes to the illegal use of cryptocurrencies, experts believe.
New Delhi-based cyberlaw expert Virag Gupta said that as Web 3.0 rolls out, crypto assets will gain popularity.
“This will change the landscape of financial fraud and crime since digital assets are a haven for criminals. Digital assets can be misused by drug traffickers, militant organizations, hawala operators and money launderers This poses a serious threat to national security and huge challenges to security agencies in India,” Gupta told IANS.
India is unprepared for the new wave of Blockchain-based cybercrimes.
“Not only is money laundering going to increase massively, but more importantly, cryptocurrencies are also going to be used for cyberterrorism and cyberradicalization,” Duggal said.
Cybersecurity expert Jiten Jain said that despite the government levying a 30% tax on digital assets including NFTs, the crypto/NFT market will explode and many companies may try to scam innocent people who do not have much technical knowledge by showing them a mirage of considerable gains.
Another conundrum for Indian law enforcement is that coverage of crypto-based tech crimes under Indian cyber law is barely there.
“We must realize that if we do not take appropriate and effective action soon, this crypto-based technology will be widely used by terrorists to target India’s sovereignty, security and integrity,” he said. warned Duggal.
It is time for legal frameworks to be changed appropriately to allow coverage of crypto or blockchain based technology and its misuse.
According to Prime Minister Narendra Modi, democratic nations should work together on cryptocurrencies to ensure they don’t end up in the wrong hands.
“Take cryptocurrency or Bitcoin for example. It’s important that all democratic nations work together on this and make sure they don’t end up in the wrong hands, which can waste our youth,” said he said during a virtual keynote at the Sydney Dialogue hosted by the Australian Strategic Policy Institute last November.
Over Rs 4,000 crore of illegal transactions via cryptocurrency exchanges have been uncovered by the Law Enforcement (ED) Directorate in India in the past year, according to reports in the same month l ‘last year.
Serious concerns have been raised about the misuse of digital coins on the Dark Web for terrorist acts and drug trafficking by militant organizations, as well as money laundering and hawala-based transactions – which poses a serious threat to national security and a great challenge to security agencies. in the countryside.
“After the 2022-23 Union Budget, senior officials warned investors of the risks involved but ignored the risks associated with underworld operations and the money laundering syndicate,” Gupta said. .
Now is the time to come up with a more holistic approach in this regard so that India can not only get the most out of crypto-based technology but also have the right legal frameworks to effectively regulate the misuse of technology. based on blockchain for purposes of committing cybercrimes and cybersecurity breaches, experts said.