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Privacy Wallets and Crypto Crime โ€“ A Top Trend in Illicit Use of Cryptocurrencies

Money and Bitcoin coins hanging from clothesline

Crypto skeptics and crypto enthusiasts rarely see eye to eye, but both camps can agree that the pace of change in the crypto world has been rapid and remarkable.

Once viewed as largely anonymous and difficult to trace, crypto transactions have become increasingly transparent as blockchain analytic tools have grown in sophistication. Crypto users seeking anonymity have in turn adapted, developing new tools and techniques to obscure transactions and shield crypto movement from scrutiny.

One of the latest innovations in the anonymity arms race is the rise of crypto privacy wallets. While these take many different forms, most privacy wallets combine security features like encryption and IP address anonymization with tools to obfuscate crypto transaction trails. They’ve gained a following among crypto purists and those simply looking for added safety when holding cryptocurrencies, but also among financial criminals and illicit actors.

In a recent webinar with ACFCS (see below for on-demand link), blockchain analytics firm Elliptic highlighted the increased use of privacy wallets as one of the top five emerging trends in financial crime and crypto.

In this episode of the CrimeCast, Elliptic’s Head of Policy and Regulatory Affairs David Carlisle takes a deep dive into the topic, giving insights on how and why privacy wallets are used for illicit transactions. He also gives insights into the regulatory response, and what institutions and organizations in the crypto space can do to mitigate potential risks.

See What Certified Financial Crime Specialists Are Saying

"The CFCS tests the skills necessary to fight financial crime. It's comprehensive. Passing it should be considered a mark of high achievement, distinguishing qualified experts in this growing specialty area."

KENNETH E. BARDEN 

(JD, Washington)

"It's a vigorous exam. Anyone passing it should have a great sense of achievement."

DANIEL DWAIN

(CFCS, Official Superior

de Cumplimiento Cidel

Bank & Trust Inc. Nueva York)

"The exam tests one's ability to apply concepts in practical scenarios. Passing it can be a great asset for professionals in the converging disciplines of financial crime."

MORRIS GUY

(CFCS, Royal Band of

Canada, Montreal)

"The Exam is far-reaching. I love that the questions are scenario based. I recommend it to anyone in the financial crime detection and prevention profession."

BECKI LAPORTE

(CFCS, CAMS Lead Compliance

Trainer, FINRA, Member Regulation

Training, Washington, DC)

"This certification comes at a very ripe time. Professionals can no longer get away with having siloed knowledge. Compliance is all-encompassing and enterprise-driven."

KATYA HIROSE
CFCS, CAMS, CFE, CSAR
Director, Global Risk
& Investigation Practice
FTI Consulting, Los Angeles

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