Evaluating cryptocurrency laundering as a complex socio-technical system

Abstract

Purpose The purpose of this paper is to present the findings from a literature review, which aimed to identify previous studies evaluating cryptolaundering from a systems thinking perspective. The aim of this paper is to first confirm that cryptolaundering systems can indeed be defined as complex socio-technical systems and second to present the findings from a systematic review of the literature to determine the extent to which previous research has adopted a systems thinking perspective. Design/methodology/approach The study involved a SLR of studies published in the peer-reviewed literature between 2009 and 2018. Rasmussen’s risk management framework (Rasmussen, 1997) was used to evaluate the extent to which a systems thinking perspective had been adopted. Findings The cryptolaundering process is considered to be a complex socio-technical system. The review demonstrates that no previous studies have defined cryptolaundering as a complex socio-technical system or used systems thinking framework approach to evaluate how criminals, regulatory bodies or law enforcement entities understand processes and assess risk within cryptolaundering systems. It is argued that using such an approach to the cryptolaundering process would likely improve assessing criminal risk analyses of cryptolaundering and assist law enforcement and regulatory bodies with understanding risk management during the laundering of cryptocurrencies. Originality/value Future assessments of cryptolaundering using socio-technical system analytical processes may afford law enforcement and regulatory bodies the opportunity to improve intervention techniques and identify gaps in regulations and enforcement.

Cryptocurrencies and financial crime: solutions from Liechtenstein

“…Moreover, cryptocurrencies offer discreet and secure avenues for online payment within the scope of dark web marketplace and online black-market transactions (Desmond et al, 2019). The steady growth of e-commerce required a payment method that is equally as trustworthy, anonymous and portable as cash while at the same time allowing international transfers (Drainville, 2012;Merlonghi, 2010).…”

“…According to Goldman et al (2017), cryptocurrencies can be used to both conceal traditional criminal proceeds and foster an increase in money laundering platforms. Researchers find that cryptocurrencies have been fully integrated into the conventional money-laundering procedure (Ajello, 2014;Desmond et al, 2019;van Wegberg et al, 2018). Bitcoin continues to be the most commonly used cryptocurrency for both legal and illicit transactions (Davidian, 2017;Reynolds and Irwin, 2017).…”

Cryptocurrencies Emerging Threats and Defensive Mechanisms: A Systematic Literature Review

“…They presented 51 defense mechanisms to secure the Ethereum ecosystem. In our SLR, we have surveyed articles discussing different cryptocurrencies and did not limit our analysis to a specific cryptocurrency, Other researchers have studied and analyzed a single attack or illegal activity, such as money laundering [84], [85] or cryptojacking [86]. A systematic literature review of the research articles discussing using cryptocurrencies in money laundering (cryptolaundering) from 2009 to 2018 was conducted in [84].…”

“…In our SLR, we have surveyed articles discussing different cryptocurrencies and did not limit our analysis to a specific cryptocurrency, Other researchers have studied and analyzed a single attack or illegal activity, such as money laundering [84], [85] or cryptojacking [86]. A systematic literature review of the research articles discussing using cryptocurrencies in money laundering (cryptolaundering) from 2009 to 2018 was conducted in [84]. The study confirmed that cryptolaundering could be considered a complex socio-technical system where multiple entities interact throughout the process, including humans, technical factors, as well as organizational and social factors.…”

Towards Sustainable Cryptocurrency: Risk Mitigations From a Perspective of National Security

“…Scientists emphasize that cybersecurity shall be developed in two levels: 1) locally 2) global cooperation of cybersecurity development. Desmond et al (2019) findings are that "the cryptolaundering process is considered to be a complex socio-technical system". Novikovas et al (2017), states, that "countries must feel concern regarding consolidation of their security".…”