Law enforcement still lacks tools, knowledge to investigate crypto crime effectively, says Codam chief

SHAH ALAM - Malaysian law enforcement agencies were ill-prepared to investigate crypto crimes as they lack the appropriate knowledge to tackle the issue effectively, said Centre Of Digital Assets Malaysia (Codam) president Tan Sri Dzulkifli Ahmad.

This was because of the complex nature surrounding the type of cryptocurrencies and exchange platforms involved with some offering completely anonymity to wallet or account holders.

Taking the world's most utilise cryptocurrency exchange Binance as an example, the platform is unlikely to share information with investigative bodies on accounts or wallet holders.

"It is very difficult for enforcement to track down which wallets belong to whom. They could trace it but they have to utilise other means of communication, research every transaction and that is very difficult.

"That is why people who engage in illegal activities use cryptocurrency because they perceived that digital currencies are hard to track, which is a wrong perception because cryptocurrency is more transparent than other forms of transaction such as banking, which can be tempered with if we know people inside the institution.

"But every transaction of cryptocurrency is recorded and it can't be altered but it is just difficult for us to know who the accounts or wallets belong to,'' he said.

The decentralised nature of cryptocurrency also adds to the complexity of any investigations as they do not possess any governing body said Dzulkifli.

"At the moment, the capacity of law enforcement to understand cryptocurrency is the one that is impeding investigations. How ready are law enforcement to investigate these crimes?'' he asked, adding that only the police have the capacity to do so but other enforcement agencies lack the appropriate tools and understanding.

Dzulkifli was speaking during Codam’s advocacy engagement on cryptocurrency and blockchain technology with Sinar Harian, Sinar Daily and Rasuah Busters earlier today.

Also present was Rasuah Busters chief secretariat Nurhayati Nordin who stated that the government must look into providing the right tools to law enforcement agencies to effectively detect illegal or corrupt activities involving cryptocurrencies.

"What we need is to provide a system to law enforcement agencies to enhance their capabilities to detect corruption or abuse of cryptocurrency transactions in certain situations.

"This includes activities such as tax evasion which has deep ramifications to the economy. Government agencies such as the Inland Revenue Board should be given the right tools so that they could tax these transactions appropriately.

"It is not that the government is imposing tax willy nilly but it is the right way of doing things and rightfully so as these transactions are done within the country,'' she said adding that the extra tax revenue could be spent on much needed public infrastructure in education or healthcare.

Nurhayati also stressed the importance of a legal guideline to govern cryptocurrency to allow proper enforcement of the law.