First ever Bitcoin exchange in relation to organised crime detected
While the details of the investigation were unstated, the Commission reported that it was a joint investigation between the Commission and the Organised Crime Squad.
The transaction was conducted in a public area and a large quantity of cash was handed to one of the persons in return for Bitcoins. The seller of the Bitcoin was subsequently detained by the investigators.
The amount of the seized assets was not identified and no other details were published. However, the Commission predicted that it was unlikely to be the last illegitimate Bitcoin transaction that they will detect.
One of the reasons for making such a prediction was the introduction of the Anti-Money Laundering and Counter Terrorism Financing (Commonwealth) Act which regulates the digital currency exchange providers. The regulation is likely to assist the Commission and law enforcement agencies with intelligence regarding suspicious cryptocurrency transactions.
Channelling proceeds of crime
The Commission identified that the proceeds of organised crime are being injected into various types of businesses, including:
- Construction companies, both large and small;
- Logistics and transport firms;
- Earthmoving businesses;
- Crane hire firms;
- Labour hire firms;
- Landscaping material suppliers;
- Panel beater repair businesses;
- Scaffolding companies; and
- Mining companies.
Through the use of legitimate business enterprises, the proceeds of organised crime are laundered. It has been identified by the Commission that such methods pose a significant problem for agencies in the confiscation of proceeds of crime, as they are difficult to trace.
Confiscation of proceeds of crime
During the financial year 2016 – 2017 (hereinafter ‘reporting period’), the Commission has principally focused on investigating:
- Organised crime related murders;
- Organised crime involvement in drug importations and the subsequent distribution of narcotics in NSW; and
- Money laundering.
The Commission indicated that the estimated realisable value of confiscation orders made against proceeds of crime during the reporting period was $30,095,309.
This figure was the third highest recorded by the Commission and significantly higher than the average for the preceding five reporting periods.
The Commission, in conjunction with the NSW police organised crime squad, seized over $8 million in cash from 1 January to 30 June 2017.
The Commission noted that proceedings against 83 out of 92 defendants were finalised during the reporting period.
The main source of income for organised criminals was identified to be from importation and distribution of illicit drugs.
Estimated realisable value by order
The total estimated realisable value of $30,095,309 of the confiscation orders was broken down by the type of order.
Most notably, the estimated realisable value of the assets forfeiture orders constituted 57% of the total estimated realisable value of the confiscation orders.
Considering that all 38 assets forfeiture orders were finalised during the reporting period, this means that the interest in assets worth $17,234,389 in estimated realisable value were surrendered to the State during the reporting period.
|Type of order||No. of orders||Estimated realisable value ($)|
|Assets Forfeiture Order||38||17,234,389|
|Proceeds assessment order||25||8,901,900|
|Unexplained wealth order||7||3,228,117|
|Breach of warranty||0||0|
|Order to compensate victims||1||730,901|
Estimated realisable value by referrals
The table below suggests the proximate relationship between the Commission and other law enforcement agencies.
|Source of referrals||No. of orders||Estimated realisable value ($)|
|Commission – NSW Police joint investigation||7||3,948,015|
|Commission, NSW Police, Australian Federal Police & Australian Border Force||1||999,920|
|NSW Police & Australian Federal Police||1||785,000|
The estimated realisable value of confiscation orders during the reporting period clearly indicates the significant extent of the Commission’s investigative powers and their capacity to confiscate proceeds of crime.
It is significant to note that the Commission had discovered the first ever Bitcoin exchange as part of their organised crime investigations.
It is envisioned that multi-agency cooperation and the regulation of the exchange providers will equip the Commission to increasingly detect and confiscate proceeds of crime involving cryptocurrencies.
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