A new report by London-based forensic accounting firm BTVK warns that the cryptocurrency market is entering the next phase. According to the advisory, regulators are on high alert and are working diligently to revamp their stance toward cryptocurrencies, eradicating shady use cases and keeping actors in the space compliant and accountable.
Reads the report,
“The portrayal of the crypto world as a lawless one has attracted the attention of lawmakers who have pledged to take a much tougher stance in 2019. Meanwhile, financial investigators are becoming more skilled at tracing assets and shining a light on some of the shady corners of the cryptoasset market.
Authors Bernard Regan, a director of forensic technology, and Alex Hodgson, a forensic accountant at BTVK and former Metropolitan Police detective who now specializes in fraud and related investigative assignments, say that by the end of 2019 jurisdictions across the EU will implement updated anti-money laundering policies impacting regulations that deal with the illicit use of cryptocurrencies.
Regan and Hodgson challenge the narrative that cryptocurrencies provide a safe hiding place for money.
“Bitcoin affords an opportunity to develop a keen understanding of the difference between traceability and attribution. It is often said, erroneously, that transactions that take place via Bitcoin are not traceable. In fact, Bitcoin transactions are among the most minutely traceable in world finance.”
They also spell out that crypto transactions leave footprints in the form of computer data, correspondence and other records.
“The success of an asset tracing assignment will depend on the investigator’s ability to uncover and interpret those records. If cryptocurrency markets were like the ‘Wild West’ in their early years, that period may be coming to a close as lawmakers look to toughen up the way in which markets are policed. In the meantime, it would be wrong to assume that investigators are powerless in the world of virtual currencies. They have many tools, old and new, at their disposal which mean that cryptocurrency markets should not be seen as a safe hiding place.”
In the US, tax collectors are reportedly planning to step up efforts to catch Bitcoin and crypto tax cheats. According to a 181-page slide deck by the Internal Revenue Service that was leaked on Twitter and verified by CoinDesk, the agency is training personnel to find crypto tax evaders by deploying a slew of new tactics.
Writes Laura Walter, a certified public accountant who reviewed the document,
“The IRS plans to use interviews, open-source searches, electronic surveillance, social media searches, and Grand Jury subpoenas given to a variety of companies.
…
The IRS also plans on serving subpoenas to collect bank, credit card, and Paypal records. These records should be analyzed to determine if any payments in or out went to parties that can send or receive crypto.
The IRS also plans to review Facebook, Twitter, and other social media platforms to find publicly available BTC and ETH addresses.”
You can check out the full BTVK report here.
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