Anthony Thompson
Professor Diwakar Yalpi
CYSE201S
September 28thth 2023
“A Comparative Analysis of Money Laundering Crimes in Indonesia through Cryptocurrency”
International Journal of Cyber Criminology
By Reda Manthovani
June 2023
Introduction
The article provides a comparative analysis of the legal frameworks in Indonesia and other nations, particularly the United Kingdom, pertaining to the regulation of cryptocurrency and its involvement in cyber-money laundering. It identifies the growing use of cryptocurrency as a source of burgeoning financial crime globally, with a specific focus on Indonesia. It explains how this problem impacts society and why it is important to understand and rectify it. The article outlines the qualitative methodology being used to study specific instances of cryptocurrency related money laundering and then compares the legal infrastructure in the United Kingdom with Indonesia. This is done as a means of identifying vulnerabilities in Indonesia’s ability to address the problem. The stated aim of the authors is to study the UK’s more robust legal frameworks as a template for emulation in Indonesia. The researcher ultimately develops a list of recommendations for changes that might best accomplish this.
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Summary
The article begins with a brief explanation of cryptocurrency and its useful applications. Once established, it explains how this technology is used as a means of facilitating financial crime, more specifically, money laundering. As this technology continues to proliferate, so will the opportunity to use it for money laundering exposing society to this risk. An increase in money laundering provides financial support for a multiplicity of potential criminal sectors, creating a serious hazard for governments to concern themselves with. As a relatively novel problem, in a country with limited legal infrastructure to address it, the article’s research aims to address the challenges and potential solutions through a comparative analysis. This qualitative analysis is done by examining more developed relevant legal frameworks of other nations and comparing to Indonesia.
According to the UN, between 2 and 5 percent of global GDP is vulnerable to the practice of money laundering annually. The authors of the paper note a difference between developed and developing economies regarding this practice. Developing economies use money laundering to conceal corrupt international transactions. The lack of robust financial infrastructure exposes impoverished, globally marginalized peoples to risks that aren’t experienced by wealthier countries. In developed nations, money laundering is primarily used as a source of tax evasion for corporations and wealthy individuals.
A central point in the article is the comparison between the UK and Indonesia. The article first addresses each nation’s approach to money laundering, followed by a comparison of the impact of cyber-laundering. This comparison is a qualitative analysis. It develops an understanding of both nations, the results of which are based on a variety of interrelated concepts and sources, including government reports and records. This is used to provide an empirical generalization of the data.
Both nations have long had a legal framework to address money laundering generally. However, in response the threat of pervasive cyber-laundering, the UK has implemented a robust infrastructure to address the problem. Traditional anti-money laundering measures have been oriented toward cryptocurrency, with firms in the industry being held to the requirements of financial institutions. Further, agencies have been set up to research and categorize types of cryptocurrency assets. Conversely, Indonesia has only just begun addressing the problem. Cryptocurrency is only recognized as a commodity in limited cases, and not recognized as a currency. This has played a role in the lack of regulation applied to the technology.
The article follows with recommendations for Indonesian authorities, including establishing the legal framework to regulate cryptocurrency transactions, establishing entities within the government responsible for monitoring cyber-laundering and collaboration with other nations to address international transactions. The article concludes by acknowledging there are limitations to this research that stem from the anonymity that characterizes the cryptocurrency world.
Conclusion
The article applies the concept of victim precipitation on a national scale. This explores behavior that can increase the likelihood of being a victim of crime. Indonesia’s slow approach to addressing cryptocurrency-based money laundering has unnecessarily exposed them to criminal exploitation and steps should be taken to address this.
The authors raise interesting points about the differences between countries and although the available data may not be precise due to the anonymous nature of cryptocurrency, their hypothesis, explanation, and conclusion are coherent.
One criticism I have of the research is that it doesn’t discuss how successful these measures have been in other nations, particularly the UK. It seems that the benefit the comparative analysis has for Indonesian authorities would be entirely dependent on how well these measures have worked in the country you’re attempting to emulate. The societal contribution to this research will be to provide a template for nations to use to address financial cybercrime. It also provides specific instructions to Indonesian society based on the analysis of their current vulnerabilities.
References:
https://cybercrimejournal.com/menuscript/index.php/cybercrimejournal/article/view/168/63