APAC’s increasing struggle with crypto crime is exacerbated by a shortage of legal resources and inadequate training for law enforcement.

According to the “2024 State of Cryptocurrency Investigations Report” from Chainalysis, the Asia-Pacific (APAC) region is experiencing a significant rise in crypto-related crime. This surge is occurring amidst a speculative shortage in legal resources, which is hampering the region's ability to effectively address and manage crypto crime.

Rise in Crypto Crime

The report highlights a substantial increase in illicit activities involving cryptocurrency in the APAC region. The respondents from public sector agencies expect the involvement of cryptocurrencies in various criminal activities to continue growing over the next five years.

Key Findings:
- Crime Types: Crypto-related crimes include drug trafficking, cybercrime, and intellectual property crimes.
- Public Sector Recognition: Hayato Shigekawa, principal solutions architect at Chainalysis, noted that while the public sector increasingly recognizes cryptocurrency as a transformative asset class, it is also becoming a channel for various forms of crime, not just specific to crypto.

Legal Resource Challenges

Law enforcement agencies in APAC face significant challenges in tackling the rise in crypto-related crimes. Many agencies report dissatisfaction with the current legal resources available for crypto investigations.

Challenges Identified:
- Staffing Resources: More than half of the respondents expressed dissatisfaction with their agency's staffing resources dedicated to crypto investigations.
- Legal Frameworks: Inconsistent legal frameworks across the region pose additional challenges. For instance, Japan faces legal limitations in digital asset forfeiture, whereas Singapore has the capability to seize digital assets, including cryptocurrencies.

Negative Perceptions and Educational Needs

Survey respondents in APAC tend to have more negative perceptions of cryptocurrency compared to other regions. A significant majority, 67.7%, believe that cryptocurrency is mainly used by criminals and malicious actors.

Perception vs. Reality:
- Negative Perceptions: This starkly contrasts with more optimistic views from regions like Latin America and Europe, the Middle East, and Africa.
- Knowledge Gap: Almost half of the respondents described themselves as not very knowledgeable about cryptocurrencies, highlighting a need for better education.

Educational Needs:
- Training Programs: The report emphasizes the importance of comprehensive training programs to improve the understanding and management of crypto-related activities.
- Technical Resources: There is a clear need for enhanced technical resources to support onchain investigations. This need is particularly pronounced in Latin America and APAC.

Conclusion

The rise in crypto-related crime in the APAC region underscores the urgent need for improved legal resources and educational initiatives. By investing in advanced technology and training programs, law enforcement agencies can better tackle the complexities of crypto crime and foster a more informed and effective approach to cryptocurrency regulation and enforcement.