A new study has found that criminals who used cryptocurrency as part of the commission of a crime are more likely to receive a heavier sentence in Australian courts.
The study, titled “Crime and Cryptocurrency in Australian Courts,” published Monday in the Monash University Law Journal, found that the use of cryptocurrency in criminal activity was seen as indicating an increased “degree of planning” and sophistication, which led the court to Consider general deterrence above other sentencing purposes:
“Obtaining and using cryptocurrency for payments requires a greater degree of technical skill than the general population, who may not be familiar with such payments.”
The study analyzed 103 cases brought before Australian courts between 2009 and 2020, with a particular focus on 59 criminal cases and sentencing procedures.
Not too complicated
Study authors Aaron Lane and Lisan Adam found that the use of cryptography is widely viewed by Australian courts as an indicator of “technical sophistication” and “deliberate obfuscation”.
However, the pair argued that Australian courts might be “too eager to adopt a relatively simplified characterization” of the use of cryptography in criminal activity, arguing that not all use of cryptography could indicate the same level of sophistication:
“Evolution exists in a wide range.”
Courts must be able to distinguish between the different types of crypto transactions used by offenders, especially as widespread adoption of digital assets continues to grow.
Offenders who have used centralized cryptocurrency exchanges – where know-your-customer (KYC) requirements mean identity can be easily obtained – cannot be treated similarly to offenders who deliberately use non-prudential wallets or hybrid services to hide transaction data.
Cryptocurrencies and digital assets have a long-standing reputation by some in the public domain as being linked to illegal activity, most likely stemming from Bitcoin’s initial association with the infamous Silk Road black market.
While this negative correlation still looms over the digital asset industry, the amount of cryptocurrencies used in illicit activity has never been lower, according to a recent report by CipherTrace.
The report estimated that illicit activity was between 0.62% and 0.65% of all cryptocurrency activity in 2020 and has since fallen to between 0.10% and 0.15% of all activity throughout 2021.