Background
INTERPOL has devised a "global stop-payment mechanism" which has enabled it to recover the largest-ever amount of funds (specifically $42.3 million) following a business email compromise ("BEC") scam.
In addition, seven individuals have been arrested.
This latest development has solidified INTERPOL's reputation as a competent player in investigating allegations of large fraud on a global scale. This has included previously intercepting hundreds of millions of dollars following various cryptocurrency scams.
INTERPOL's Operation First Light
INTERPOL's "global stop-payment mechanism", known as I-Grip Mechanism, forms part of INTERPOL's global police operation called Operation First Light. We have explored this topic in a previous blog entitled INTERPOL's Global Police Operation: Operation First Light.
As discussed in our blog, INTERPOL's efforts as part of the Operation First Light also cover investigating allegations of financial crime, including crime involving cryptoassets.
INTERPOL and cryptoassets
More specifically, we have previously written about INTERPOL's specialist team developed to coordinate global efforts to combat crime involving digital assets.
As noted in our previous articles, there have been increasing reports of countries using INTERPOL to pursue individuals on allegations of being involved in criminality concerning cryptoassets.
Indeed, INTERPOL has recently been more active in seizing online digital wallets and exchanges, including seizing the exchange knows as Cryptonator for allegedly receiving the proceeds of crime.
Suitability of INTERPOL
There is no doubt that crime in crypto presents unique challenges to authorities, the decentralised nature of crypto and the distance between them and more conventional financial institutions creates significant hurdles in international policing.
The UK continues to pass legislation enabling authorities to investigate and seize assets suspected of being used in criminal activities relating to crypto (please see our other blogs on crypto regulation).
Other INTERPOL members, however, may not be as quick in establishing a regulatory framework, making international cooperation even more challenging.
However, it remains the case that given the decentralised and borderless nature of some cryptoasset transactions, an organisation with global reach such as INTERPOL would be very well placed to assist coordinating the steps required for both pursuing individuals on allegations of involvement in criminal offences related to crypto and tracing any associated proceeds of crime.
As always, there would be a need to ensure that INTERPOL is used in strict compliance with all its applicable rules and regulations.
International dimension of offences involving crypto
Using INTERPOL to pursue allegations involving cryptoassets is not unheard of. Following earlier 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, Gherson's criminal litigation, investigations and regulatory team wrote a blog entitled "Can INTERPOL issue a Red Notice in relation to allegations involving crypto?".
INTERPOL was also involved in attempting to locate Ignatova Bajatova who featured the OneCoin scandal.
As well as being at risk of INTERPOL measures such as Red Notices, those who fear that allegations involving crypto have been made against them could also be at risk of extradition.
As was discussed in a previous blog entitled "Can I be extradited for allegations involving crypto?" and "Another US crypto extradition", due to the borderless nature of crypto transactions, any allegation of criminality will inevitably involve multiple jurisdictions. As such, there may be numerous countries asserting jurisdiction and trying to extradite an alleged perpetrator to their territory to face justice. Indeed, there have now been two examples of individuals being extradited to the US in relation to allegations involving crypto.
The vast majority (if not all) of criminal allegations that underpin a crypto criminal investigation are of a financial crime nature, e.g. fraud, money laundering and insider dealing. They can also include alleged offences relating to the breach of financial regulations.
These offences, by their very nature, can take place across multiple jurisdictions and therefore, a country could assert jurisdiction and extradite an individual who has not even stepped foot in that country.
As such, jurisdictions might additionally utilise INTERPOL to locate individuals and seek their arrest prior to issuing an extradition request.
Moreover, due to the nature of the technology used for cryptoasset transactions, and as this technology becomes more prevalent, it is expected to see a large increase in the instances of using INTERPOL for locating individuals accused of crime involving crypto.
International crypto dimension – criminal investigations, litigation and extradition
Those who fear they may be subject to an extradition request from the UK or concerned about liability across multiple jurisdictions, including the UK, should get in touch.
Gherson's criminal litigation, regulatory and investigatory team combine an expert knowledge of criminal and regulatory law underpinned with a firm understanding of digital assets and blockchain technology. As such, the team is able to provide expert strategic advice to anyone facing investigation in relation to any allegation of criminality involving cryptoassets. Working alongside the extradition team, Gherson's criminal litigation, investigations and regulatory team is able to provide an unparalleled service in any case with an international dimension. Gherson has a large network of professional contacts in other jurisdictions, which enables it to build multi-jurisdictional teams to assist with any suitable defence.
INTERPOL, Red Notices and crypto
In addition, those who fear that a jurisdiction may have requested INTERPOL to process data on them, which may include allegations of offences involving crypto, or concerned about potential liability, should get in contact.
Indeed, Gherson Solicitors continue to receive requests for expert advice and assistance from those who fear they may have outstanding financial issues. Our 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.
- 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 may 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 or are exposed to firms that undertake this activity 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.
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.