A new study has found that criminals who used cryptocurrency to commit a crime are more likely to receive a tougher sentence in Australian courts.
The study, named “Crime and Cryptocurrency in Australian Courts” published on July 18 in the Monash University Law Review, explains that the use of cryptocurrency in criminal activity was seen as indicating an increased “degree of planning” and sophistication, leading the court to “consider general deterrence above other sentencing purposes.”
The study of 103 cases presented to Australian courts between 2009 and 2020, with a specific focus on 59 criminal cases and their sentencing procedures.
Study authors, Dr. Aaron Lane and Dr. Lisanne Adam found that Aussie courts broadly observe crypto use as being indicative of “technical sophistication” and “intentional obfuscation.”
Nevertheless, the pair claimed that Aussie courts may be “too eager to adopt a relatively simplistic characterization” of crypto use in criminal activity, arguing that not all crypto use can signify the same level of sophistication.
“Sophistication exists on a spectrum.”
Courts must be able to distinguish between the different types of crypto transactions used by criminals, as the wider adoption of digital assets continues to grow.
Perpetrators that used centralized digital currency exchanges — where KYC requirements mean that identification can be readily obtained — cannot be treated similarly to offenders that intentionally use anonymous non-custodial wallets or mix services to obscure transaction data.
Cryptocurrency and digital assets have an enduring reputation by some in the public realm as being linked to illegal activity, most likely stemming from Bitcoin’s initial association with the infamous darknet black market Silk Road.
Though this negative connotation still emerges in the digital asset industry, the amount of crypto used for illicit activity has never been lower according to a recent report from CipherTrace.
The report assessed that illicit activity was between 0.62% and 0.65% of overall cryptocurrency activity in 2020, and has since fallen to between 0.10% and 0.15% of overall activity throughout 2021.
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