ASIC takes aim at anonymisation

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ASIC takes aim at anonymisation

Hindering investigations.

The Australian Securities and Investment Commission has called for greater powers to combat a perceived rise in financial crime aided by anonymising technologies and platforms.

The financial regulator told a parliamentary committee that its surveillance efforts were being undermined by technologies that obscured the identity and activities of participants.

It took aim at the rise of cryptocurrencies like Bitcoin, which it said could be used to transact with “dark web” sellers.

ASIC was also unhappy with growing levels of encryption, particularly on over-the-top telecommunications and chat services, which it said further thwarted its ability to conduct surveillance.

It wants - among other demands - “access to telecommunications intercept material” as well as an ability “to obtain and share telecommunications data with its foreign counterparts, which will help with, for example, the investigation of dark web activity facilitated by actors located overseas”.

“We are unable to receive telecommunications intercept material (i.e. from a live stream of the content of communications carried over a telecommunications service), as we are not an ‘interception agency’ under the relevant legislation,” it said.

ASIC said it had “limited direct visibility” into the dark web.

This is not just because it can’t gain the “trust” of dark website operators; ASIC is also worried about how it could “quarantine” dark web access from other systems, or even recognise financial crime in these forums as there is little existing software available for that purpose.

The regulator further said “enforcement challenges posed by the dark web are compounded by the use of virtual currencies".

Virtual currencies have suffered dips in recent weeks owing to continuing fears about regulation - and ASIC calling them out as a crime aid is unlikely to help in that regard.

ASIC noted the difficulty in keeping track of the contents of virtual currency wallets "which can easily be opened, transferred and concealed, usually without providing personally identifiable information”.

Further, it pointed to the use of “algorithms to break links between payer wallets and payee wallets, or between a transaction and previous transactions”, the use of tools to obscure an IP address “used to make a transaction or access a wallet”, and even what it called an increase in cryptocurrency transactions “being conducted person-to-person and outside of exchanges.”

To a lesser extent, ASIC also called out encryption and cloud as two other technologies that made life difficult when it comes to investigations.

Similarly challenging is the rise in use of WhatsApp, Skype, Facebook and others for IP telephony and messaging.

Records of calls made using these services are generally difficult to get access to, as the online service provider is typically outside of ASIC’s jurisdictional boundaries.

But as more communications go through these channels, ASIC sees its ability to gain information from telecommunications dwindling.

“Traditional sources of telecommunications information accessible to ASIC, such as call charge records, are becoming less and less useful,” it said.

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