Belgian Researcher: Authorities Should Be Prepared For The Breakthrough Of Cryptocurrencies
According to a researcher, all Belgian investigation services, the tax inspection to law enforcement authorities, must prepare for the breakthrough of virtual money.
Dirk Dierickx, head of the E-Audit of the Belgian tax authorities who specializes in both bitcoins and altcoins, stated that since virtual currencies are not regulated, they are very susceptible to fraud. The researcher shared his experiences and knowledge with inspection and security agencies around the world. Recently, Justice Minister Koen Geens (CD & V) announced that Belgium eliminates the âfree playâ of virtual currencies, meaning that tax and other inspection authorities will strongly surveil cryptocurrencies for suspected fraud.
When Belgian news outlet tijd.be asked about the research Dierickx conducted, he said that the country had seen a significant increase in the use of virtual currencies. According to the researcher, companies in Belgium accept cryptocurrencies as payments, even the smaller ones such as pizza vendors, but they often exchange the virtual currencies to euros soon after the payment was made.
“For example, at a gas station, someone was paying with bitcoins, but half an hour later the station which had accepted the payments, converted the bitcoins into euros. Why? Because of the large fluctuation. Bitcoin was once worth more than 1,000 euros but dropped to 400 euros. Businessmen and merchants will not take that risk. They use the coins initially only as a commercial asset to sell more. That is until now our determination. But when it comes to drug trafficking and money laundering crypto currency is widely used to commit fraud. And we focus our attention on that,â Dierickx said.
The news outlet pointed out to the researcher the fact that more Flemish seek refuge in virtual coins as an alternative to a savings account that âprovides nothingâ. Dierickx replied that Belgium and the neighboring countries are widely engaged in the blockchain system behind cryptocurrencies. According to him, a third of the nodes, which record the transactions, is in the US. Another third is spread across the neighboring countries: the UK, Netherlands, Germany and France. He added that there are only a few different groups of people who support virtual currencies. The first are âworld reformersâ, a small group that does not want to support more banks after a financial crisis happens. The second are citizens who live in countries where they are repressed. A significant part of bitcoin and altcoin users are cybercriminals, thatâs why the researcher and his team are surveilling the dark web for criminal activities.
“A colleague of mine, however, is in the business, has itself become a victim of ransomware. He had to pay the scammers with bitcoins, via an âonion’ address and through the dark web. Criminals assume that it is completely anonymous. But that’s not it … We still found a few ways to determine their identity. The biggest problem is the decentralization. It is easier to be kept as data on a central provider on a particular server. Thus we can easily expose rogue systems and networks. Then, the criminals are vulnerable. Look at the ‘silk road’, one of the first platforms in the dark web that focused on drug trafficking. The FBI has traced where the central servers were with all the data. I have discussed this with the FBI. They also fear decentralization,â the researcher said.
Dierickx explained the news outlet that virtual currenciesâ breakthrough started in 2009 when bitcoin came onto the surface. According to him, central banks are seeking to implement the blockchain technology to create altcoins that can be kept under control. However, if that happens, there will still be virtual currencies that will focus on criminal activities, such as fraud and tax evasion.
The news outlet stated that justice minister Geens announced that the attorney general and the confiscation department will develop a procedure to detect virtual money, which will also make the procedure of seizing virtual money from criminals easier for authorities. The researcher replied with a warning, according to him, law enforcement authorities should be careful when confiscating cryptocurrencies. He emphasized that investigators should seize all private keys and login details from the criminals to efficiently secure the currencies.