ha tinh gifted model united nations club

- chtmun mock#2 -

unodc
united nations office on drugs and crime
 CHTMUN MOCK #2
United Nations Office on Drugs and Crime
***

A. DAIS INTRODUCTION
I. Thuy Linh, Le - Chairperson
II. Ba Thinh, Phan - Chairperson
III. Khanh Linh, Nguyen Thi - Chair Assistant
IV. Bao Chau, Bui Ngoc- Content Developer
V. Thi Le Ngan, Tran - Content Developer
VI. Minh Quan, Tran - Content Developer
B. COUNCIL INTRODUCTION
I. HISTORY & FOUNDATION
II. SCOPE AND AUTHORITIES
III. MEMBER STATES
IV. INTRODUCTORY NOTES & COUNCIL EXPECTATIONS
C. COMMITTEE TOPIC: INVESTING IN THE CLIMATE CRISIS
I. TOPIC INTRODUCTION
II. DEFINITION
III. CURRENT SITUATION AND FORTHCOMING CHALLENGES
1. Current Situation
2. Forthcoming Challenges
IV. INTERNATIONAL RESPONSES
1. United Nations’ responses
2. Other international and regional responses
V. CHRONOLOGY OF EVENT
1. United States of America
2. Canada, Dominion of
3. Luxembourg, Grand Duchy of
4. French, Republic of
5. United Kingdom
 6. Nigeria, Federal Republic of
7. South Africa, Republic of
8. China, People’s Republic of
9. Japan
10.India, Republic of
11.Singapore, Republic of
12.Saudi Arabia, Kingdom of
13.El Salvador, Republic of
VI. COUNTRY STANCES/ FEATURES
VII. QUESTIONS TO CONSIDER
VIII. POSSIBLE BLOCS
D. REFERENCES
E. CREDITS

A. DAIS INTRODUCTION
 I. Thuy Linh, Le - Chairperson

My name is Thuy Linh, and I am honored to be serving as the Chair of

UNODC at CHTMUN MOCK #2. I wholeheartedly greet all
distinguished participants in our committee.
In this conference, delegates will convene to solve an interesting issue:
cybercrime and fraud involving cryptocurrency, a novel problem
characterized by frequent technological advancements. Delegates' duties
are to promote cybersecurity and raise awareness of the threats and fraud
in cyberspace, with the ultimate goal of eradicating cybercrime and
cryptocurrency fraud entirely. With this innovative topic, I am confident
that each delegate will enjoy the process of brainstorming and developing
creative solutions.
I believe that my time with other Chairs and the Delegates as part of
CHTMUN MOCK #2 would be a great time, fraught with excitement and
youthful creativity. Our collaboration is not only for the committee to
effectively combat cybercrime and eliminate cryptocurrency fraud but
also for amicable connection and bond. I am looking forward to a
successful and enjoyable conference this April!

II. Ba Thinh, Phan - Chairperson

Distinguished Delegates, Esteemed Observers, and fellow Organizing

Committee members and staff,

It is my utmost pleasure to greet you all - the amazing, talented delegates

of this year's second mock in CHTMUN. My name is Phan Ba Thinh,
currently in my second year at Phan Boi Chau High School for the Gifted.
And today, I welcome you to UNODC - UNITED NATIONS OFFICE ON
DRUGS AND CRIME.

I think, for both me and you, MUN is something that will have a constant
presence in our lives. I often liken MUN to something of a drug, the more
you go, the more you experience, the more you love and embrace it. The
task may seem daunting for you now, but best believe, MUN is not about
competition or anything of the sort. It is a place where fun and
professionalism can coexist, where you can learn from the best with no
stigma and stress, and where a few days can shape the experience of a
lifetime. MUN is not only a passion for me, but it has transformed into an
obligation, an obligation to guide others - you - to this amazing world I
got the chance to experience, an obligation I am more than happy to carry
out.
In CHTMUN MOCK #2, I am delighted to announce that this committee
will be the cooperation between Lê Thùy Linh and me, together with our
numerous content developers. Today, we are gathered here to discuss a
topic of great significance and urgency: "TACKLING
CRYPTOCURRENCY FRAUD". In the context of the ever-advancing
technological situation the world is in, crimes pertaining to bullying,
blackmailing and fraud using new technology are on the rise, as the
UNODC Committee, we have the mandate to make the world safer from
drugs, crime, corruption and terrorism across all platforms, including the
computerized world.

I have always dreamt of this day, one where I'll be able to guide people
through the wonders of MUN. The lump in my throat extends into a
quivering voice as I say this: thanks to you, dear reader, it finally will be. I
have high hopes, for I have come to know, you all have incredible talent
and flair. With bubbling anticipation, I believe this committee will become
a success, and the problem of cyber security, a thing of the past.

Yours truly,
Phan Ba Thinh

III. Khanh Linh, Nguyen - Chair Assistant

Distinguished Delegates, Esteemed Observers, and fellow Organizing Committee

members and staff,

My name is Nguyen Khanh Linh, and I am a 10th student at Phan Boi

Chau high school for the gifted. It is my utmost honour to serve as a
Chair Assistant of UNODC at CHTMUN MOCK #2. I would like to
warmly welcome each and every distinguished participants in our
committee.
In this conference, we are here, together discuss a challenging and
burning issue :“Tackling cybercrime and cryptocurrency fraud”. In the
context of this ever-evolving world with the high advancement and
development in technology and changes in global economy, safety
security for users, customers must be ensured and improved. As
delegates in the UNODC committee, we have the responsibility to
advance the cybersecurity and raise the awareness of cyberspace’s threats
and fraud among users aiming at the resolving cybercrime and
cryptocurrency completely.

Being a part of the CHTMUN MOCK#2, I believe and hope that the
participants and involvolved sides have the willingness and make an
effort to collaborate to find the most practical and efficient solutions
allowing the committe and governments to gradually rule cybercrime and
cryptocurrency out, which is the prerequisite for a successful and fruitful
conference.

Yours sincerely,
Nguyen Khanh Linh

IV. Bao Chau, Bui Ngoc - Content Developer

Honorable Chairs, Fellow Delegates, Respected Observers, and esteemed

colleagues of the Organizing Committee,

First and foremost, I am thrilled to extend a warm welcome to all

prospective delegates for the CHTMUN Mock#2. I am Bui Ngoc Bao
Chau, a student at Ha Tinh high school for the Gifted, and it is a
privileged honor to guide you on your forthcoming journey as a content
developer for the United Nations Office on Drugs and Crime (UNODC).

Having been an observer and a tentative delegate myself, I fully

comprehend that participating in MUN can be intimidating for some.
Notwithstanding, I want to shed light on the fact that the essence of
Model United Nations (MUN) lies in research, self-assurance, and
teamwork. The information acquired from our background guide and
your personal research will empower you to generate a plethora of
innovative ideas. These ideas, when combined through teamwork, will
evolve into comprehensive solutions. This is how MUN enhanced my
self-confidence and connected me with extraordinary, intelligent
individuals. I am flattered to relive these mixed feelings, this time not just
as a delegate, but as a content developer.

Becoming a part of this committee, delegates get the opportunity to

discuss the subject “Tackling cryptocurrency fraud”. Given that every
nation globally is susceptible to cybercrime, especially cryptocurrency, it
presents a chance for delegates to contemplate investment policies, which
play a pivotal role in combating cryptocurrency fraud at CHTMUN
Mock#2!

With warm regards,

Bui Ngoc Bao Chau.

V. Thi Le Ngan, Tran - Content Developer

Honorable chairs, fellow delegates and esteemed observers,

I am Tran Thi Le Ngan, a twelve-grade student at Phan Dinh Phung high

school in Ha Tinh city. To begin with, I would like to send my utmost
welcome to all delegates and observers coming to CHTMUN MOCK#2.
It’s also a great pleasure for me to be your content developer for the
United Nations Office on Drugs and Crime.

With the ongoing trend of technological advances and online usage such
as shopping and selling online, people are gradually becoming familiar
with investing in stocks and cryptocurrencies, but this also creates an
opportunity for a new form of criminal - cryptocurrency fraud - to carry
out attacks on users. In this conference, delegates will have to learn about
cryptocurrency policies of one’s country as well as discuss and propose
directions and solutions to the problem of “Tackling cybercrime and
cryptocurrency fraud.”

I hope to hear all your ideas along with your discussion on this topic in
order to dig deep into the problem. Please note that this session is not a
test or anything of the sort, but a chance for you to speak out your ideas
and feel free to express yourself as a delegate.

Best regards,

Tran Thi Le Ngan.

VI. Minh Quan, Tran - Content Developer

Honorable chairs, fellow organizing team members and esteemed

observers,
First of all, I would like to welcome and appreciate all the future delegates
and observers that choose our upcoming CHTMUN Mock#2 as your next
destination for your own experiences. My name is Tran Minh Quan,
studying at the Ha Tinh High school for Gifted students in Ha Tinh city,
Vietnam. It is of my great excitement and honor to be your content
developer for this preseasonal and preliminary CHTMUN Mock#2.
In a Model United Nation conference, every delegate is given
opportunities to express their opinions on a heap of contemporary issues
based on their own knowledge and intellectual abilities.
This means that every conference is a place for every individual to
unleash their own potential in terms of mitigating the prevalent and
global issues that require rigorous inspections and brainstorming.
Everyone in this generation is the future of the nation and the world, so
this place is suitable for all of you to train and progress your own abilities
for the sake of the future world.
As far as we are concerned, cryptocurrency fraud is considered a
widespread issue, a significant threat to the stability of the digital market
and global network, one of the prolonged crises that demand solutions as
quick and precise as possible. Cryptocurrency is decentralized assets,
which foster an anonymous and almost undetectable environment for
illicit trades and criminal misuse, which will impact a country's overall
sustainability.
Acknowledging the prevalence and the adverse effects of this catastrophe,
the United Nation Office on Drugs and Crime called forth every possible
and considerable measure from every delegate In this CHTMUN Mock#2
session, delegates will exploit the topic "Tackling cryptocurrency fraud". I
wish for the best performances from every delegate in terms of
constructing the best Draft Resolution for this issue, and hope that you
can cultivate your own potential and skills so as to be ready for any
forthcoming challenges in the near and far future.
Truly regard,
Tran Minh Quan

B. COUNCIL INTRODUCTION

I. HISTORY & FOUNDATION

The United Nations Office on Drugs and Crime (UNODC) is a global

leader in the fight against illicit drugs and international crime. It was
established in 1997 through a merger between the United Nations
Drug Control Programme and the Centre for International Crime
Prevention.

Since its establishment, UNODC has been committed to making the

world safer from drugs, organized crime, corruption, and terrorism.
The scale of these problems is often too great for states to confront
alone, so UNODC offers practical assistance and encourages
transnational approaches to action.

UNODC operates in all regions of the world through an extensive

network of field offices. The organization is committed to supporting
Member States in implementing the 2030 Agenda for Sustainable
Development and the 17 Sustainable Development Goals (SDGs) at its
core.

The structure of UNODC consists of several main divisions and

regional offices. The divisions focus on specific areas of crime and
drug control, providing technical expertise, advice, and guidance to
member states and other stakeholders. The regional offices coordinate
and implement the organization’s activities at a local level. UNODC’s
structure is designed to facilitate its mission of making the world safer
from drugs, organized crime, corruption, and terrorism.
Sure, here’s a more detailed illustration of these components of the
United Nations Office on Drugs and Crime (UNODC):

● Office of the Executive Director (OED): This is UNODC’s

central command, led by the Executive Director, taking charge of
overseeing all program activities, setting strategic directions, and
ensuring the organization’s goals. The Executive Director
represents UNODC at the highest levels, including at the United
Nations General Assembly and other international forums.
● Independent Evaluation Section (IES): The IES conducts
independent evaluations of UNODC’s programs and activities
to assess their impact, relevance, efficiency, and sustainability.
The findings and recommendations of these evaluations are
used to improve program design and implementation.
● Division for Management (DM): This division provides
essential support services to the entire organization. The DM
oversees the financial resources, human resources, and
information technology services of UNODC, ensuring the
necessary resources and capabilities required to carry out its
mandate effectively.
● Division for Operations (DO) and Division for Treaty Affairs
(DTA): These divisions are at the forefront of UNODC’s efforts
to combat illicit drugs and international crime, being responsible
for implementing UNODC’s mandate. They work closely with
Member States and other stakeholders to develop and
implement programs and initiatives aimed at preventing illegal
actions.
● Regional Offices: UNODC operates through a network of
regional offices located around the world. These offices have the
right to coordinate and implement UNODC’s activities at a local
level. They are a pivotal factor in addressing the specific needs
and challenges of each region.
● Partnerships: UNODC recognizes the importance of
partnerships in achieving its goals. The organization collaborates
with a wide range of partners, including local governments, civil
society organizations, the private sector, and academia. These
 partnerships help to mobilize resources, expertise, and support
for UNODC’s work. They also facilitate collaboration and
cooperation on a wide range of issues related to drugs and
crime.
II. SCOPE AND AUTHORITIES

The United Nations Office on Drugs and Crime (UNODC) has a broad
scope and authority in its mission to make the world safer from drugs,
organized crime, corruption, and terrorism by inspiring, informing,
and enabling nations and peoples to improve their quality of life.
There are six areas of concentration in the UNODC work programme,
which are:

1. Health, Security, and Justice: By combating drug abuse and

trafficking, organized crime, and corruption, UNODC helps to
create safer environments. This work includes providing
support for drug prevention, treatment, rehabilitation, and
reintegration efforts. It also involves strengthening criminal
justice systems to ensure fair treatment and respect for the rule
of law.
2. Transnational Approaches: The global nature of issues like drug
trafficking and organized crime requires a coordinated
international response. UNODC facilitates this by encouraging
countries to collaborate and providing practical assistance for
cross-border actions. This can involve sharing information,
coordinating law enforcement efforts, and harmonizing legal
approaches.
3. Sustainable Development Goals (SDGs): UNODC’s work
contributes to several of the 17 SDGs - A part of the 2030 Agenda
for Sustainable Development, which was adopted by all United
Nations Member States in 2015, including those related to
health, peace, justice, and strong institutions. By helping
countries implement the 2030 Agenda for Sustainable
Development, UNODC is playing a part in global efforts to end
poverty, protect the planet, and ensure prosperity for all.
 4. HIV Prevention: UNODC’s work in HIV prevention is
particularly focused on populations that are often underserved
by health services, such as people who use drugs and people in
prisons. By promoting services that respect human rights and
focus on public health, UNODC helps to ensure that these
individuals have access to the care they need.
5. Data and Analysis: Reliable data is essential for effective
policy-making and intervention planning. UNODC is capable of
collecting and sharing international statistics on drugs and
crime. This data can help to identify trends, assess the impact of
interventions, and guide future efforts.
6. Training and Support: UNODC’s training programs help to
build the capacity of prison authorities and law enforcement
agencies. This includes widening communities’ knowledge of
HIV prevention and care, which can help to address the high
rates of HIV in many prison populations. By working with civil
society, UNODC also enables citizens to expand access to these
services even in communities or prisons.

III. MEMBER STATES

The UNODC has 20 field offices covering over 150 countries,

composed of various member states. These member states are
distributed among 33 different national groups:

● Twelve for African States

● Nine for Asian States
● Eight for Latin American and Caribbean States
● Four for Eastern European States

The UNODC’s strategic vision includes specific plans for Africa 2030
and Latin America and the Caribbean 2022-2025. It carries out the
organization’s objectives in six regional countries: Bangladesh,
Bhutan, India, the Maldives, Nepal, and Sri Lanka. The UNODC
incorporates the secretariat of the International Narcotics Control
Board (INCB).
IV. INTRODUCTORY NOTES & COUNCIL EXPECTATIONS

UNODC at CHTMUN Mock#2 will clarify the topic: “Tackling

cryptocurrency fraud”. This “UNODC Guidebook” is designated as a
guide for the selected delegates to support their participation in the
Office and the Committee Meetings. It outlines the roles and
responsibilities of the Office members and there are legislatively high
prerequisites specifically to select Member States to be the
representatives. It helps Member States to further get a grip on the
illicit arms trade as a whole. As selected representatives from each
Member State are required to attend Office meetings, where members
participate in discussion and debate on a wide range of subjects in
order to make choices that represent the general public interest of the
government's domain.

During CHTMUN Mock#2, delegates representing Member States of

United Nations Office on Drugs and Crime will stimulate an annual
prestigious meeting; thus, a diplomatic and academic atmosphere is
highly suggested to propose the best viable solutions to the given
topic. A majority is required for all divisions made by the Committee,
including both procedural and substantive choices like voting on
amendments and segments of draft reports. This indicates that the
decisions will be discarded if the number of votes cast in favor of the
division does not equal two-thirds of the overall quorum.

C. COMMITTEE TOPIC: Tackling cryptocurrency fraud.

I. TOPIC INTRODUCTION

Over the course of the former decade, crypto adoption has been
pervasive in the field of trading and banking methodology since
the inception of the first ever cryptocurrency named Bitcoin in
2009 as a method of payment. However, any new innovation
and technology would pose any serious issue and problem to
the individuals and societies, which is not exceptional for crypto.
An increasing rate of cryptocurrency fraud is reported in recent
years, requiring enormous efforts from individuals and
international bodies to address. Therefore, countries have to
 build up and effectuate efficient and long-term strategies,
consisting of every possible and rigorously considered solution
in order to mitigate the situation at the present and in the near
future.

It is urgent for the influential countries to propose suitable and

adequate actions to tackle the aforementioned circumstances,
including the act of suppressing the criminals from perpetrating
as well as enhancing individual awareness so as for the citizens
to confront the issues elegantly and precisely. It is commonly
known that crypto crimes generally pertain to high-precision
and flexible technologies, which are increasingly difficult to
prevent or to avert, thereby causing severe losses and damage.
From market manipulation techniques such as
pump-and-dumps to imposter websites and mining scams, since
crypto transactions are irreversible the chances of recovering any
losses due to fraud are next to minimal. The attractive nature of
“getting rich quickly” often creates a more pressured
environment for investors, therefore people are acting more on
impulse and but not performing the right due diligence checks,
which leads to a wide range of cryptocurrency fraud. In the end,
civilians are the one who received most of the damage,
subsequently negatively affecting the countries' economies and
societies.

Staying at the frontline of the crisis, the United Nations Office on

Drugs and Crime are conscientiously proposing possible actions
to ameliorate the prevalence of cryptocurrency fraud as much as
mitigate the current situations in global countries and territories,
to protect the citizens' own rights and properties and
concurrently foster a more sustainable society. In this context, we
will be discussing every role and solution that the UNODC can
handle in this issue, alongside with the following challenges and
adversities that may demand more diligent efforts to surpass.

II. DEFINITION
In particular, cryptocurrency fraud is proven to drive a serious
threat to individuals, businesses, and government entities and
can result in significant financial loss, damaged reputation, and
compromised records. Regarding the contemporary situation, it
is critical for us to inspect the detrimental effects on the
individual and organization sectors as well as the existing
methods utilized by the crime perpetrators in order to submit
any feasible solution to the mitigation of crime commission. In
addition, the magnitude and breadth of the subsequent
difficulties, financial resources and prudent investment are
required to support mitigation.

Cryptocurrency exchange: A type of stock exchange that

includes the act of buying and selling in digital currencies such
as Bitcoin, Ethereum or Tether, taking place on digital
marketplace such as mobile devices or personal computers.

Crypto adoption: The growing acceptance and integration of

cryptocurrencies and blockchain technologies into mainstream
society and economies.

Fraud: Criminal deception intended to result in financial or

personal gain, by virtues of sophisticated strategies through
email phishing, banking activities or even social media
platforms and online shopping.

Multi Factor Authentication: A common security protocol that

prevents data breaches, hacks, and other direct cyber-attacks,
operating via a multitude of identifications to authenticate
access. For instance, these can be additional passwords or access
code.

Virtual Private Networks: A service that encrypts online

activities to enable users to browse the Internet with reinforced
security and anonymity, working as intermediaries between
personal devices and the targeted servers.
Security Awareness Training: A form of training that is
intended to help educate users on how to better identify, avoid,
and mitigate the threat of cyber-attacks.

Blockchain: A cryptographic database that stores, shares and

replicates information about every crypto transaction in blocks
of data, which are chained together in chronological order that
can be exploited via an Explorer.

Change Address: A separate address belonging to the sender,

known as the change address, is used to receive the balance of
unused funds in every transaction.

Cluster: A group of cryptocurrency addresses that are controlled

by the same person or entity.

Common Spend: A heuristic, or method, used by blockchain

analysts to identify other cryptocurrency addresses controlled by
the subject of any cyber investigation.

Darknet Market: A website that facilitates the sale and exchange

of illicit goods and services on the dark web.

Distributed Ledger Technology: A consensus-based ledger

system with an audit trail maintained and validated by nodes.

Fiat: A traditional type of currency issued through a central

banking authority and produced in physical notes and coins, in
contrast to the non-fiat or cryptocurrency.

High Risk Exchange: A virtual asset services provider

characterized by a general lack of transactional due diligence,
customer verification, and regulatory compliance.
 Initial Coin Offering: An investment offering in which private
companies raise funds by issuing and selling new
cryptocurrency coins or tokens to investors.

Layering: A technique for obscuring the origin and destination

of illicit funds by adding extra levels of complexity to the
transaction trail.

Mining: The process of creating new crypto coins by solving

cryptographic equations.

Node: The name for computers across the blockchain network

that validate and relay transactions.

Protocol: A set of rules that dictates how nodes verify and

record transactions.

Seizure: A legal mechanism for forfeiture of property associated

with the commission of a crime.

Wallet: An application, service or device that holds its user’s

cryptocurrency addresses, public keys and/or private keys

Wallet Scoring: A risk assessment of cryptocurrency users,

commonly conducted for regulatory compliance or investigative
analysis.

III. CURRENT SITUATION AND FORTHCOMING

CHALLENGES

1. Current Situation

Despite efforts made throughout the forfeiture and rebound of

cryptocurrency assets from illicit addresses in the recent years,
the number of cryptocurrency fraud remained high due to the
fact that the criminals have been developing their methods in
order to breach hi-tech security protection layers through the use
of profits in terms of the decentralized and anonymous digital
assets such as cryptocurrency as well as there are always a heap
of gullible investors that fall for their "traps". Consumers
reported losing over $1 billion to fraud involving
cryptocurrencies from January 2021 through March 2022,
according to a new analysis from the Federal Trade Commission
of the USA. FTC's fraud reports also suggest cryptocurrency is
quickly becoming the payment of choice for many scammers,
with about one out of every four dollars reported lost to fraud
paid in cryptocurrency, with the main feature in terms of fraud
method recorded as bogus investment opportunities. Annual
losses from cryptocrime fluctuated in extensive degree with no
guarantee of any certain and predictable downgrade.
Chainalysis's Crypto Crime Report estimated $24.2 billion worth
of illicit transaction volume for 2023, which is still significantly
lower in comparison to the statistics representing 2022; however,
the aforementioned figure is roughly higher than the year of
2021. These statistical figures proved that cryptocurrency fraud
is never comprehensively mitigated throughout the international
and the fact that cryptocurrencies is still providing a high degree
of anonymity that is often unattainable in the traditional
financial system, making the trend of crypto crime always on the
loose.

In addition, it is also reported that more illicit addresses are

discovered, which results in an increase in the total value of
illegal transaction volume, following with the losses and the
revenue that the cybercriminals have received. Initially, Crypto
Crime Report asserted that the illicit transmission value in 2022
was $20.6 billion, but after update and revision in 2023, the same
figure stated $39.6 billion. The main driver for the increase came
from the identification of previously unknown, highly active
addresses hosted by sanctioned services, as well as their
addition of transaction volume associated with services in
sanctioned jurisdictions to the illicit totals beside the main
features such as ransomware, terrorism financing and many
others. It seems that crimes take place in various forms, the
outcomes are also distinct, eventually adding to the increasing
profits for the fraudsters. Besides, the primary reason
conventional cybersecurity professionals are reluctant to devote
resources to the digital currency arena is the belief among many
top experts that cryptocurrencies are little more than financial
fraud, which facilitates the incessant acts of cryptocurrency
fraud and still impacts the vulnerability of the investors. It is
currently known that cryptocurrencies are still providing a high
degree of anonymity that is often unattainable in the traditional
financial system, making the trend of cybercrime always on the
loose. The issue should never be ignored in every aspect.

Meanwhile, governments have since taken major steps to

combat cybercrime and cryptocurrency fraud and therefore
protect users — and it is believed that the work is far from over.
More than 200 countries, including the United States, have
implemented the standards of Financial Action Task Force - a
global money laundering and terrorist financing watchdog,
which comprises Anti-money Laundering and Countering the
Financing of Terrorism programmes, to cut off the ability of
criminals and terrorists to launder illicit funds and to empower
law enforcement to effectively fight financial crime, including
cryptocurrency fraud. On conforming to the standards, law
enforcement agencies can employ blockchain analysis tools to
trace illicit cryptocurrency transactions to their cash out points,
serve legal processes to those businesses, and obtain the
information associated with the relevant cryptocurrency
addresses. Whereas, the illicit actor cashes out in a country
where FATF standards haven’t been implemented, such
information may not exist, which indicates that such sort of
jurisdictional arbitrage is certainly detrimental to criminal
investigations of all kinds. At the same time, Germany, Malta
and other countries have recognized Bitcoin and other
cryptocurrencies as a legitimate medium of exchange for discreet
 transactions, giving it acceptance and validity in the world of
finance. As a result, a certain degree of criminals are inclined to
perpetrate in these favorable environments, regardless of strict
regulations and anti-laundering law enforcement that these
countries have been applying.

2. Forthcoming Challenges

In order to tackle cryptocurrency fraud, influencers have to

understand every possible adversity and hindrance awaiting
while proceeding to take any measure and action. Here are some
general challenges that require efforts and calculations from
multifaceted administrations and individuals.

a) Challenges in the monitoring of cryptocurrency

transactions.

A rise in theft, fraud, and money laundering has accompanied

the surge in cryptocurrency adoption. Statistics reveal that
almost $2 billion was stolen in crypto through hacks in 2022.
Criminals laundered $8.6 billion of cryptocurrency in 2021 alone.
This highlights the urgent need for effective transaction
monitoring. However, there are still some difficulties and
challenges alongside the application of any module of
transaction monitoring.

One of the hardships of cryptocurrency transaction monitoring

is the lack of a regulatory framework. Unlike traditional
financial systems, there is no centralized authority governing
cryptocurrencies, making it difficult to establish a consistent
regulatory framework. This lack of regulation has made it easier
for criminals to conduct illicit activities such as money
laundering and terrorist financing using cryptocurrencies.

Another challenge of cryptocurrency transaction monitoring is

the anonymity and pseudonymity of transactions. In fact,
cryptocurrency transactions are not linked to the identity of the
parties involved and instead use wallet addresses, which can be
created anonymously. This anonymity makes it difficult to track
the source and destination of transactions and to identify the
parties involved in suspicious transactions.

Different cryptocurrencies and blockchain networks have

varying levels of transparency, making it difficult to track
transactions across different blockchains. This makes it
challenging for financial institutions and regulators to monitor
and identify suspicious activity involving multiple
cryptocurrencies or blockchain networks.

b) Challenges accompanied with addressing concerns related

to investor protection and market manipulation.

Unlike traditional financial systems where clear rules safeguard

consumers’ interest, such safety nets are often missing in the
crypto world. This lag is primarily due to regulators grappling
with understanding and adequately legislating cryptocurrency
markets which are still fairly new and constantly evolving. In
recent years, high-profile global insolvencies related to crypto
have brought into sharp focus these regulatory challenges that
need immediate attention from policymakers worldwide who
are striving to balance innovation with investor protection in
these digital asset markets. Without robust consumer protection
guidelines, unsuspecting investors may fall prey to scams,
frauds or data theft – highlighting the dire need for
comprehensive regulations in this field.

Additionally, one of the major challenges in cryptocurrency

regulation is the lack of regulations to prevent collapses. The
volatile nature of cryptocurrencies and the decentralized
structure of blockchain technology make them highly
susceptible to market manipulation, fraud, and financial
collapses. Without appropriate regulatory measures in place,
there is a risk of investors losing their funds due to fraudulent
activities or sudden price fluctuations. This lack of regulations
also makes it difficult for authorities to intervene and protect
consumers when issues arise within crypto exchanges. As a
result, it becomes crucial for policymakers to develop
comprehensive regulations that address these risks and ensure
stability in the cryptocurrency market. Recently, regulatory
authorities are focusing on implementing stringent cybersecurity
measures for crypto exchanges. Know Your Customer (KYC)
procedures are being enforced to verify user identities, while
Anti-Money Laundering (AML) regulations are being
strengthened to prevent illicit activities. Increased awareness
about potential risks and educating users about best practices for
securing their digital assets play a crucial role in mitigating data
theft and financial fraud within the cryptocurrency industry.

There are worries about privacy breaches through blockchain

analysis tools that can trace transactions and link them to
specific individuals. These concerns highlight the need for
robust security measures and regulatory oversight to ensure
both data security and user privacy in the cryptocurrency
market.

c) Adversities against the investigation of cryptocurrency

fraud.

Anonymity and pseudonymity of cryptocurrency transactions

Investigating cryptocurrency crimes presents significant
challenges due to the inherent anonymity provided by
cryptocurrencies such as Bitcoin. Transactions are recorded on a
public ledger known as the blockchain, but the identities of the
individuals involved are often represented pseudonymously.
This anonymity poses a formidable obstacle for law enforcement
and security organizations, as there is no direct association
between a cryptocurrency address and the real-world person
behind it. Criminals can exploit this anonymity to transfer funds
swiftly and effortlessly between parties, enabling them to evade
detection effectively. Furthermore, criminals continually employ
a variety of tools and techniques to further enhance their
anonymity on the blockchain, striving to outpace law
enforcement's efforts to track and apprehend them.

Encryption and privacy

Cryptocurrencies leverage encryption techniques to safeguard
transactions and wallets, thereby guaranteeing privacy and
security for lawful users. Nonetheless, this very encryption can
present challenges for investigators endeavoring to obtain
transaction details or wallet information during an investigation.
Deciphering or circumventing robust encryption can prove to be
a demanding and resource-intensive undertaking, consuming
significant time and effort.

Lack of traditional financial infrastructure

Cryptocurrencies function in a realm separate from the
conventional financial system, thereby posing greater difficulties
when it comes to utilizing established financial institutions or
regulatory mechanisms for monitoring unlawful activities.
Investigators may encounter obstacles in acquiring banking
records, immobilizing assets, or retrieving funds, as these
procedures lack the simplicity found in traditional financial
crimes.

Global scale and jurisdictional challenges

The decentralized nature of cryptocurrencies presents a unique
challenge in establishing jurisdictional boundaries and
facilitating coordinated efforts among multiple nations. This
jurisdictional ambiguity can be exploited by criminals, posing
significant difficulties for law enforcement agencies in
conducting investigations and bringing offenders to justice. Due
to their global reach, cryptocurrencies facilitate instantaneous
and borderless transactions. Exploiting this characteristic,
criminals can swiftly transfer funds across jurisdictions,
effectively evading local law enforcement authorities. In such
cases, the cooperation and collaboration of international
agencies become paramount. However, the absence of
standardized regulations and varying approaches to
cryptocurrencies across countries can impede effective
coordination in combating these illicit activities.

Evolving technology
The realm of cryptocurrencies and associated technologies is
constantly evolving, presenting investigators with new and
intricate challenges. Criminals are swift in embracing emerging
cryptocurrencies, privacy-oriented coins, and innovative
methodologies. As a result, it is imperative for investigators to
remain abreast of the latest trends and advancements in order to
effectively combat cryptocurrency-related crimes.

Rapidly evolving criminal techniques

Criminals continuously refine their tactics to exploit
vulnerabilities within the cryptocurrency ecosystem. They
employ various strategies, such as utilizing newly developed
privacy-centric coins, capitalizing on decentralized exchanges,
or employing sophisticated hacking techniques. To effectively
counter these evolving methods, it is crucial for investigators to
commit to ongoing training and invest in research and
development efforts. By doing so, they can better equip
themselves to tackle emerging threats within the dynamic
landscape of cryptocurrency-related crimes.

Absence of formal and legal provisions making cross-border

investigation difficult
Cryptocurrencies operate globally, surpassing traditional
geographical boundaries, which can present challenges in cases
involving multiple jurisdictions. The absence of formal and legal
provisions for cross-border cooperation can impede
investigations by hindering the coordination of efforts,
information sharing, and evidence gathering across diverse legal
systems. Cryptocurrency investigations often require access to
sensitive data held by service providers, exchanges, or
individuals located in different countries. The lack of formal
provisions complicates the process of navigating data sharing
and privacy concerns. Each jurisdiction may have varying rules
and regulations concerning data protection, which hampers the
exchange of crucial information. In the absence of established
provisions, obtaining legal assistance or mutual cooperation
from foreign jurisdictions becomes more intricate. This includes
requests for information, acquiring search warrants or
subpoenas, freezing assets, or extraditing suspects. The absence
of standardized procedures results in delays and inconsistencies
in cross-border investigations. Cryptocurrency crimes involve
intricate legal and regulatory issues such as money laundering,
fraud, and illicit activities. The lack of formal provisions hinders
the harmonization of laws and regulations across jurisdictions.
Differences in legal frameworks lead to disparities in how crimes
are defined, investigated, and prosecuted, posing obstacles to
effective cross-border cooperation.

Limited resources and funding

Law enforcement agencies often encounter resource constraints
when dealing with cryptocurrency crimes. The intricate nature
of these investigations demands specialized skills, tools, and
technology, which may not always be easily accessible or
affordable. The complexity of analyzing and tracing
cryptocurrency transactions, securing digital evidence, and
staying updated with the latest developments in the field
necessitates investment in specialized resources. However,
budget limitations and competing priorities can pose challenges
in providing law enforcement agencies with the necessary
resources to effectively combat cryptocurrency-related offenses.

Difficulty in recovering stolen or lost funds

Recovering stolen or lost funds in the aftermath of a
cryptocurrency crime can prove to be an arduous task. Unlike
traditional financial systems, cryptocurrencies lack a central
authority that can reverse or freeze transactions. Once funds are
transferred in the decentralized network, tracking and retrieving
them become challenging endeavors.

Lack of awareness and education

The limited knowledge and understanding of cryptocurrencies
among potential victims and law enforcement personnel can
create challenges in investigating and preventing cryptocurrency
crimes. For potential victims, lack of awareness about the risks
associated with cryptocurrencies can make them vulnerable to
scams, fraud, and other malicious activities. Without
understanding how cryptocurrencies work or the precautions
needed to secure their digital assets, individuals may
unknowingly fall victim to scams or provide sensitive
information to criminals. Similarly, law enforcement personnel
who are unfamiliar with cryptocurrencies may face difficulties in
identifying and investigating cryptocurrency-related crimes. The
unique nature of digital currencies, decentralized networks, and
complex technologies involved can be unfamiliar territory for
investigators. Without sufficient knowledge and training, it
becomes harder to recognize suspicious activities, gather
evidence, and build a strong case against perpetrators.
Awareness campaigns and education are crucial to address these
challenges. It is important to provide resources and training
programs that help individuals, especially potential victims and
law enforcement personnel, understand the basics of
cryptocurrencies, recognize common scams, and learn about best
practices for secure transactions and protecting digital assets. By
increasing awareness and knowledge about cryptocurrencies,
we can empower potential victims to make informed decisions
and protect themselves from fraud. Additionally, well-informed
law enforcement personnel will be better equipped to
investigate and prevent cryptocurrency crimes, leading to a safer
environment for all users of digital currencies.

Difficulty in gathering digital evidence

 Cryptocurrency crimes leave behind a wealth of digital
evidence, such as blockchain data, transaction records, and
online communications. Investigating and analyzing this
evidence is a complex task that requires specialized skills and
tools. Law enforcement agencies need to work closely with
technology companies and service providers to obtain the
necessary information and cooperation. This may involve
requesting data from cryptocurrency exchanges, online
platforms, or digital wallet providers. However, obtaining this
cooperation can be challenging due to factors such as privacy
concerns, jurisdictional issues, or the reluctance of companies to
share sensitive information. Specialized tools and expertise are
also crucial for effectively analyzing the digital evidence.
Investigators need to have a deep understanding of blockchain
technology, data analysis techniques, and cybersecurity
measures. They may utilize forensic software and other
advanced tools to trace transactions, identify patterns, and
connect the dots in the investigation. To enhance the
investigation of cryptocurrency crimes, it is important for law
enforcement agencies to invest in training and equipping their
personnel with the necessary skills and tools. Collaboration and
cooperation with technology companies and service providers
are essential for accessing the relevant digital evidence and
ensuring a thorough investigation.

IV. INTERNATIONAL RESPONSES

1. United Nations’ responses

The United Nations, particularly through the United Nations

Office on Drugs and Crime, has taken several steps to address
cryptocurrency crime, including provision of specific assistance
to other organizations. In response to the phenomenon, UNODC
has developed a world-leading Cryptocurrency Investigation
Train-the-Trainers course and delivered, on 11th May, 2017, the
first courses on cryptocurrency investigation. In essence, law
enforcement experts from 22 countries and UNODC regional
staff participated in the Cryptocurrency Investigation Training
course, and learned about the business profile and global
ecosystem of cryptocurrencies, including Bitcoin and Ethereum.
The practitioners got first-hand information about how to
conduct bitcoin tracing as a part of a wider financial
investigation, as leading law enforcement experts from the
United States showcased how to plan bitcoins investigations,
where to obtain information, and how to collaborate
internationally on casework. The course also focused on
developing a new set of skills for participants such as
understanding the cryptocurrency concept and cooperating
internationally on cryptocurrency cases. A second course,
focusing on the analysis of cryptocurrency transactions,
chokepoints investigation, Bitcoin AML framework and case
studies, was delivered to participants from more than 20
countries. Throughout the training, participants learned to speak
the same analytical cryptocurrency language and spread the
acquired knowledge among colleagues in their jurisdictions.
With the help of UNODC's niche training, mentoring and
advice, law enforcers around the globe are minimizing the
ability of criminals to evade capture and harm society. In
addition, UNODC builds partnership with the actors from the
RegTech and FinTech sector, and collaborates with
cryptocurrency industry leaders like Chainalysis Inc. to assist
law enforcement officers and analysts to trace illegal financial
flows. In 18th October, 2021, at Bangkok, Thailand, due to the
growing concern related to ransomware, a specific type of
cryptocurrency fraud, UNODC delivered a practical regional
training on ransomware investigations to law enforcement
officers, computer security incident response teams, and
prosecutors from Malaysia, the Philippines and Thailand. Within
the rise of cybercrime rate owing to the increased digitization
compounded by COVID-19 pandemic, ransomware has
skyrocketed to become the most prominent malware threat that
requires countermeasures. As a response to this significant and
rising threat, the training developed by UNODC focused on
strengthening Member States’ ability to effectively investigate
and prosecute ransomware and other financially-motivated
cybercrimes, including cryptocurrency-enabled crime. Improved
information sharing among jurisdictions to foster public-private
partnerships was also addressed. UNODC Cybercrime and
Cryptocurrency Advisor for Southeast Asia and the Pacific has
asserted that ransomware attacks have skyrocketed in the past
years, increasingly targeting critical national infrastructures,
disrupting business processes, and compromising vital data that
they require to function; therefore, it is crucial to develop a
collaborative and coherent response to these threats, and
UNODC has been working closely with Member States to
strengthen their national and cross-border operational capacity
to respond to ransomware. Also it is known that the
aforementioned training course was funded by the Government
of Japan. Besides, UNODC has instigated the Global Programme
against Money Laundering, Proceeds of Crime and the financing
of Terrorism (GPML) in order to provide in-depth assistance to
countries to build and strengthen their anti-money laundering
and countering financing of terrorism (AML/CFT) capacity,
which is designated to combat cryptocurrency crime. GPML has
specifically been tasked by the United Nations General
Assembly, most recently in resolutions 74/177 (2019), 73/186
(2018), 72/196 (2017), and 71/209 (2016) to continue providing
technical assistance to Member States to combat money
laundering and the financing of terrorism in accordance with
United Nations related instruments and internationally accepted
standards, including, where applicable, recommendations of
relevant intergovernmental bodies, inter alia, the Financial
Action Task Force on Money Laundering, and relevant
initiatives of regional, interregional and multilateral
organizations against money laundering. Additionally, goal 16.4
of the Sustainable Development Goals indicated that Member
States must engage in the mitigation of organized crime and
 illicit financial and arms flows, including cryptocurrency-related
crimes, by 2030.

2. Other international and regional responses

Cryptocurrency fraud is considered a prevalent issue as the

Internet users around the globe are negatively affected as well as
the crypto market and global network are severely deteriorated.
Efforts from multifarious bodies, including international and
regional services, are indispensable for the alleviation of the
issue. Several actions were taken in recent years in order to
tackle the hi-tech cryptocurrency crimes.

December 8th, 2021, in Lyon, France, co-organized by

INTERPOL, Europol and the Basel Institute on Governance, the
5th Global Conference on Criminal Finances and
Cryptocurrencies was hosted virtually by the Basel Institute, in
which the conclusion indicated that the world’s financial
systems can be protected by increasing multi-sector cooperation
to strengthen cryptocurrency crime investigations. The event
brought together more than 3000 representatives from law
enforcement, the judiciary and Financial Intelligence Units from
130 countries to shape international cross-sector solutions
against the criminal use of cryptocurrencies.

Recently, the 7th Global Conference on Criminal Finances and

Cryptocurrencies was hosted at Europol’s headquarters in
October 26th, 2023 with the co-organisations of INTERPOL and
the Basel Institute on Governance, which concluded that
tackling the criminal use of cryptocurrencies is a race against
time. Law enforcement agencies from more than 100 countries
that collaborate in joint task teams and proactively collaborate
with the private sector are getting ahead of the criminals. In
contrast, countries that do not take the risks seriously are in
danger of becoming a haven for crypto-enabled scams, money
laundering and terrorist financing. Asserted by Europol’s
Deputy Executive Director Operations, criminals aren't giving
up on misusing cryptocurrencies anytime soon, so in early 2023,
Europol's Strategy 'Delivering Security in Partnership' is
adopted in order to highlight the pivotal role that
cryptocurrencies play in the financial schemes of criminals. It is
acknowledged that Europol is convinced of the value of
partnering with the Basel Institute on Governance to bring
together law enforcement and private sector representatives
from across the world to share their insights and to collaborate
on how they respond to emerging technologies.

At the present, the Financial Action Task Force, through its

regional body GAFILAT, has been working with international
policymakers, especially the Latin American countries in which
crypto adoption is widely effectuated, to develop and
implement appropriate and effective legislation, regulation, and
enforcement measures in line with the FATF’s standards. In
addition, the United States Secret Service and the Federal Bureau
of Investigation have been reliance in terms of cybercrime
prevention, as they have engaged in the seizure of the illicit
market using cryptocurrency such as "The Silk Road" in 2013 as
well as the confiscation of the illegal trading funds and stolen
crypto assets. They are also acting in response to cyber attack
and ransomware targeting on U.S organizations.

With the help of the international organizations, more countries

are executing detailed and rigorous investigations and
preventions on the outburst of cryptocurrency fraud in this
contemporary era, in order to ameliorate the prevalence of this
issue and protect the netizen's right and personal data as well as
maintain the operations of the global network. However, the
criminal misuse of cryptocurrency is still an ongoing situation
due to the advance of technologies and the decentralized nature
of the crypto assets that still appear to be appealing to criminals
around the world, so this work is far from being done.
Consequently, it is urgent for countries to follow the trend of the
 issue and to cooperate to find specific solutions to every possible
scenario in the future.

V. CHRONOLOGY OF EVENT

Timeline Event

1982 UC Berkeley David Chaum, the pivotal figure in crypto’s

early development, published a paper titled “Computer
Systems Established, Maintained, and Trusted by Mutually
Suspicious Groups,” which laid the groundwork for future
developments in the blockchain space.

1990s Chaum released a digital currency called “eCash” through his

company, DigiCash. Though eCash attracted the attention of
companies like Microsoft, DigiCash ran out of funds by 1998.

Late 1990s Encouraged by Chaum's example, many developers tried to

create a digital token that would mimic the price stability of
gold, such as EGold and Bit Gold. However, none of them
were successful.

2008 An anonymous person (or group) named Satoshi Nakamoto

published the famous whitepaper, “Bitcoin: A Peer-to-Peer
Electronic Cash System,” which laid out the plan for a
peer-to-peer internet-based currency.

January The first Bitcoin block (aka “genesis block”) was mined by
2009 Nakamoto, who soon sent the first successful Bitcoin
transaction to the developer Hal Finney.

2010 Laszlo Hanyecz made the first recorded real-world purchase

with Bitcoin when he bought Papa John’s pizzas for 10,000
BTC (Bitcoin Currency). While these developments were
exciting to those in the cryptographic space, they didn’t
capture mainstream attention. Big crypto exchanges didn’t
 exist, and information on Bitcoin was just beginning to trickle
through the internet.

2011 Bitcoin experienced its first price pump, jumping from $1 per
coin to almost $9.

2012 The nonprofit Bitcoin Foundation was created by those

involved in the Bitcoin community to help further Bitcoin’s
acceptance and adoption. Bitcoin Magazine also launched its
first issue in the same year, and Bitcoin began to gain
mainstream attention, attracting new blockchain enthusiasts
to the game.

Early 2010s Bitcoin’s price rose to the triple-digit range, and adoption
continued to increase, but technology for wallets (a necessary
to transact coins) was immature, and there were no insurance
protections or centralized crypto exchanges (CEXs).

The first major crypto hack occurred in 2011, when the crypto
exchange Mt. Gox lost 25,000 bitcoins worth approximately
$400,000. At that time, the crypto exchange handled nearly
2011 -2014 70% of all bitcoin transactions. Mt. Gox was attacked again in
2014. It lost almost 650,000 of its customers' bitcoins and about
100,000 of its own. At the time, that was 7% of all bitcoins and
was worth approximately $473 million.

Bitcoin’s price skyrocketed, soaring through the $10,000 range

and briefly touching $20,000 before falling into a “crypto
winter.” (a long period of depressed asset prices in the
2017-2018 cryptocurrency markets). During this time, developers had
many heated discussions over how to scale the Bitcoin
network. Some walked away from Bitcoin to create Bitcoin
Cash, while Bitcoin loyalists proposed a special settlement
layer on top of Bitcoin, now known as the Lightning Network.

2020 The crypto market returned to life as at the start of the year,
bitcoin was still regarded as an insignificant investment, being
 dismissed as having "no value." By the end of the year,
however, bitcoin's value had nearly quadrupled, reaching an
all-time high of more than $28,000 and forcing itself into the
spotlight among major investors and Wall Street businesses.

March The largest cryptocurrency hack to date, targets the network

2022 that supports the popular Axie Infinity blockchain gaming
platform. Hackers breached the Ronin Network and made off
with around $625 million worth of Ethereum and the USDC
stablecoin.

October One of the most high-profile attacks in cryptocurrency history,

2022 the Binance exchange, was hacked for $570 million,
highlighting the need for tighter blockchain security.

September Mixin Network, a Hong Kong-based crypto project, was hit

2023 with the largest crypto exploit of the year. The firm had to
abruptly cease operations after hackers plundered a
staggering $200 million from users’ hot wallets.

VI. COUNTRY STANCES/ FEATURES

1. United States of America:

The United States maintained a nuanced stance on

cryptocurrency, characterized by a mix of regulatory oversight
and fostering innovation. Regulatory bodies such as the Securities
and Exchange Commission (SEC), the Commodity Futures
Trading Commission (CFTC), and the Financial Crimes
Enforcement Network (FinCEN) were actively involved in
overseeing various aspects of the cryptocurrency market. While
there were efforts to ensure compliance with securities laws and
prevent fraud and manipulation, policymakers also recognized
the potential of cryptocurrency and blockchain technology for
innovation and economic growth. However, the regulatory
landscape remained complex, with ongoing discussions in
Congress about the need for clearer regulatory frameworks to
 balance innovation with investor protection and financial stability.
Moreover, the executive branch played a crucial role in shaping
cryptocurrency policy through directives and appointments
within agencies such as the Treasury Department. Overall, the
United States approached cryptocurrency regulation with the aim
of fostering innovation while ensuring consumer protection and
regulatory compliance.

2. Canada, Dominion of:

Canada's stance on cryptocurrency reflected a proactive approach

aimed at fostering innovation while ensuring regulatory
compliance and consumer protection. The Canadian government
and regulatory bodies, including the Financial Transactions and
Reports Analysis Centre of Canada (FINTRAC), the Canadian
Securities Administrators (CSA), and the Office of the
Superintendent of Financial Institutions (OSFI), have been
actively engaged in regulating various aspects of the
cryptocurrency ecosystem. While cryptocurrencies are not
considered legal tender in Canada, they are subject to anti-money
laundering and counter-terrorism financing regulations enforced
by FINTRAC. The CSA oversees the regulation of cryptocurrency
exchanges and trading platforms, requiring compliance with
securities laws to protect investors and maintain market integrity.
Additionally, the OSFI monitors the involvement of federally
regulated financial institutions in cryptocurrency-related activities
to mitigate risks to the financial system. Canada has also
demonstrated support for blockchain technology through
initiatives such as the Blockchain Research Institute and
government-funded blockchain projects. In summary, Canada's
strategy for cryptocurrency regulation has been defined by a
balance of encouraging development while guaranteeing
regulatory monitoring to mitigate risks and build consumer trust
in the emerging digital asset market.

3. Luxembourg, Grand Duchy of:

 By promoting a climate that is favorable to digital assets and
blockchain technology, Luxembourg has established itself as a
center of innovation and investment for cryptocurrency in
Europe. Blockchain-based companies and cryptocurrencies are
being regulated by the Luxembourg government and regulatory
bodies, such as the Commission de Surveillance du Secteur
Financier (CSSF), in a progressive manner. Luxembourg has
created a transparent legal framework for virtual currencies,
promoting investor trust and regulatory certainty. The country's
business-friendly policies and favorable regulatory framework
have drawn a considerable number of fintech enterprises and
cryptocurrency exchanges. Furthermore, Luxembourg has
demonstrated initiative in investigating the possibilities of
blockchain technology beyond cryptocurrency, as seen by projects
like the Luxembourg Blockchain Lab and partnerships with
industry players to create blockchain-based solutions for many
industries. Luxembourg's stance on cryptocurrency reflects its
commitment to embracing technological innovation while
ensuring regular oversight to protect investors and maintain the
integrity of the financial system.

4. French, Republic of:

The French government, led by regulatory bodies such as the

Autorité des Marchés Financiers (AMF) and the Autorité de
Contrôle Prudentiel et de Résolution (ACPR), has implemented
measures to regulate and supervise cryptocurrency-related
activities. France has introduced a legal framework that requires
cryptocurrency service providers to obtain licenses and comply
with anti-money laundering (AML) and know-your-customer
(KYC) regulations to prevent illicit activities. However, amidst
regulatory oversight, France has also shown support for
blockchain technology and digital assets, recognizing their
potential to enhance financial services and promote economic
growth. The French government has initiated several
blockchain-focused initiatives, including the PACTE law, which
provides a legal framework for initial coin offerings (ICOs) and
 tokenization of assets. Additionally, France has been actively
involved in European Union discussions on cryptocurrency
regulation, advocating for a balanced approach that fosters
innovation while ensuring consumer protection and financial
stability. Thus, France's position on cryptocurrencies indicates its
dedication to maximizing the benefits of blockchain technology
while limiting associated dangers through specific laws and
regulations.

5. United Kingdom:

The United Kingdom authorities, through governing bodies such

as the Financial Conduct Authority (FCA), have taken steps to
monitor cryptocurrency-related operations and ensure compliance
with anti-money laundering (AML) and know-your-customer
(KYC) requirements. To operate legally in the UK, cryptocurrency
exchanges and trading platforms must register with the FCA and
follow tight regulatory guidelines. Furthermore, the UK
government has expressed an interest in investigating the
possibilities of central bank digital currencies (CBDCs) and
distributed ledger technology (DLT) to modernise the financial
system and improve payment efficiency. While noting the risks
connected with cryptocurrencies, such as market volatility and the
possibility of illegal use, the United Kingdom has also recognised
the revolutionary potential of blockchain technology and digital
assets for innovation and economic progress.

6. Nigeria, Federal Republic of:

Nigeria's approach to cryptocurrencies has been marked by a

combination of governmental monitoring and increased
enthusiasm for exploiting the potential of digital assets for
economic empowerment and financial inclusion. While the
Central Bank of Nigeria (CBN) has expressed worries about the
hazards connected with cryptocurrencies, such as money
laundering and terrorist financing, there has been a considerable
increase in cryptocurrency use and trading among Nigerians.
Despite periodic legislative constraints, such as the CBN's
 regulation forbidding financial institutions from supporting
cryptocurrency transactions, Nigeria has established itself as one
of Africa's top cryptocurrency markets. The Nigerian government
has expressed a desire to experiment with blockchain technology
and its uses in a variety of industries, including finance, supply
chain management, and healthcare. Additionally, there has been a
growing interest among Nigerian regulators and policymakers in
developing a clear regulatory framework for cryptocurrencies to
balance consumer protection with fostering innovation and
investment in the digital asset space.

7. South Africa, Republic of:

The South African Reserve Bank (SARB) and the Financial Sector
Conduct Authority (FSCA) have taken a measured approach to
regulating cryptocurrencies, emphasizing the need for consumer
protection and mitigating financial risks. While cryptocurrencies
are not recognized as legal tender in South Africa, the government
has not imposed outright bans on their use or trading. Instead, the
focus has been on developing regulatory frameworks to monitor
and regulate cryptocurrency activities, including requiring
cryptocurrency exchanges to register with the FSCA and comply
with anti-money laundering (AML) and know-your-customer
(KYC) regulations. Despite regulatory scrutiny, South Africa has
seen growing interest and adoption of cryptocurrencies among its
citizens, with increasing numbers of individuals and businesses
exploring digital assets as investment opportunities and payment
methods. On top of that, blockchain technology's potential to
address several socioeconomic concerns in South Africa, such as
boosting supply chain transparency and financial inclusion, has
been recognized.

8. China, People’s Republic of:

The Chinese government, particularly the People's Bank of China

(PBOC) and other regulatory bodies, has implemented various
bans and crackdowns on cryptocurrency-related activities. These
measures include prohibiting financial institutions from providing
 services related to cryptocurrencies, banning initial coin offerings
(ICOs), and shutting down cryptocurrency exchanges. China has
also taken steps to limit mining activities, citing concerns over
energy consumption and financial risks associated with
speculative trading. Despite the strict regulatory stance on
cryptocurrencies, China has shown interest in developing its own
digital currency, the digital yuan, or e-CNY, as a means to
maintain control over its monetary system and potentially counter
the influence of decentralized cryptocurrencies. The Chinese
government views the digital yuan as a tool to enhance financial
inclusion, improve payment efficiency, and strengthen its
oversight of the financial sector. Overall, China's stance on
cryptocurrency reflects its commitment to maintaining financial
stability and control while exploring opportunities presented by
blockchain technology within a tightly regulated framework.

9. Japan:

Japan has been notably progressive, establishing itself as one of

the most cryptocurrency-friendly countries globally. The Japanese
government, through the Financial Services Agency (FSA), has
implemented a comprehensive regulatory framework to govern
cryptocurrency exchanges and trading platforms, aiming to
protect investors and maintain market integrity. Japan recognized
cryptocurrencies as legal tender in 2017, providing legitimacy to
digital assets and facilitating their adoption within the country.
The FSA introduced licensing requirements for cryptocurrency
exchanges, mandating compliance with stringent security
measures, customer protection protocols, and anti-money
laundering (AML) regulations. Despite occasional security
breaches and regulatory challenges, Japan has maintained a
supportive stance on blockchain technology and digital assets,
fostering innovation and investment in the cryptocurrency space.
Furthermore, Japan has actively engaged in international
discussions on cryptocurrency regulation, advocating for a
balanced approach that promotes innovation while ensuring
consumer protection and financial stability. Overall, Japan's stance
 on cryptocurrency reflects its commitment to embracing
technological advancements while implementing robust
regulatory measures to mitigate risks and foster a vibrant and
sustainable cryptocurrency ecosystem.

10.India, Republic of:

India's stance on digital currencies is marked by a lack of

regulation and a cautious strategy when it comes to digital assets.
The Reserve Bank of India (RBI) has expressed concerns about the
risks associated with cryptocurrencies, including their potential
for money laundering, terrorist financing, and consumer
protection issues. In 2018, the RBI issued a circular prohibiting
banks and financial institutions from providing services to
cryptocurrency-related businesses, effectively restricting the
cryptocurrency industry's access to traditional banking services.
However, this ban was overturned by the Supreme Court of India
in March 2020, leading to increased activity in the Indian
cryptocurrency market. Despite the legal ambiguity surrounding
cryptocurrencies, the Indian government has shown interest in
exploring the potential of blockchain technology for various
applications, such as digital identity management and supply
chain transparency. There have been discussions within the Indian
government about introducing legislation to regulate
cryptocurrencies, with proposals ranging from outright bans to
more nuanced regulatory frameworks. The regulatory landscape
remains uncertain, with stakeholders eagerly awaiting clarity on
India's approach to cryptocurrency regulation.

11.Singapore, Republic of:

The Monetary Authority of Singapore (MAS), the country's

central bank and financial regulator, has implemented a
comprehensive regulatory framework to govern cryptocurrency
activities while fostering a conducive environment for innovation.
Singapore has embraced cryptocurrencies as a legitimate asset
class, with the MAS recognizing them as digital payment tokens
that can be used for various purposes, including payments and
 investments. Cryptocurrency exchanges and trading platforms are
required to comply with strict regulatory standards, including
measures to prevent money laundering and terrorist financing.
Singapore's regulatory approach aims to strike a balance between
promoting innovation and ensuring consumer protection and
financial stability. The country has also shown support for
blockchain technology beyond cryptocurrencies, with initiatives
such as Project Ubin, a collaborative project exploring the use of
blockchain for interbank payments and settlements. Singapore's
favorable regulatory environment, coupled with its strategic
location and strong infrastructure, has attracted numerous
cryptocurrency businesses and investors, solidifying its position
as a global leader in the digital asset space.

12.Saudi Arabia, Kingdom of:

Saudi Arabia has taken a cautious approach to bitcoin, with the

government strictly regulating digital assets. The Saudi Monetary
Authority (SAMA), the central bank of the nation, has refused to
recognize cryptocurrencies as legal cash and has advised against
investing in or trading digital currencies due to their speculative
character and potential risks. While there is no formal restriction
on cryptocurrency activity in Saudi Arabia, SAMA has issued
statements cautioning individuals and businesses about dealing
with cryptocurrencies and highlighting the importance of
adhering to existing financial regulations. The Saudi government's
cautious stance arises from fears that cryptocurrencies could be
used for illegal objectives such as money laundering, terrorism
financing, and fraud. Despite the regulatory skepticism towards
cryptocurrencies, Saudi Arabia has shown interest in exploring
blockchain technology for various applications, particularly in
sectors such as finance, logistics, and government services There
have been discussions and initiatives exploring the use of
blockchain for specific applications, but the focus has largely been
on the technology itself rather than on cryptocurrencies. In
conclusion, Saudi Arabia's stance on cryptocurrency remains
 cautious, with a preference for traditional financial systems and a
conservative approach to embracing digital assets.

13.El Salvador, Republic of:

El Salvador has become a figurehead in the adoption of

cryptocurrencies, particularly Bitcoin. It gained international
attention in June 2021 when it became the first nation to accept
Bitcoin as legal tender. President Nayib Bukele led the charge on
this decision because he believed that cryptocurrencies could be a
way to address a number of economic problems, such as high
remittance costs and problems with financial inclusion. With
measures like the Bitcoin Law, which attempts to encourage the
use of Bitcoin for regular activities, including tax payments, the
government has taken a proactive stance on cryptocurrencies. On
the other hand, this action has drawn both support and criticism
from both domestic and foreign sources. Supporters praise the
innovation and its potential economic benefits, but detectors point
out that cryptocurrencies are volatile. Despite the controversy, El
Salvador's stance on cryptocurrency reflects a bold step towards
embracing digital innovation in finance, with the government
actively exploring ways to harness its potential while navigating
the associated risks.

VII. QUESTIONS TO CONSIDER

1. What do we need to advocate for enhanced international

collaboration among law enforcement agencies, financial
institutions, and cryptocurrency exchanges?
2. How crucial is the establishment of a centralized platform for
sharing real-time information on suspicious transactions,
addresses, and wallet IDs in cryptocurrency fraud?
3. Have the law enforcement officers, prosecutors, and financial
analysts understood the complexities of cryptocurrency
transactions yet?
4. What is the positive impact supporting initiatives like the
Cryptocurrency Investigation Train-the-Trainers course
developed by UNODC will have on addressing cryptocurrency?
 5. What is the relation between cybercrime and cryptocurrency?
6. Should we make use of cybercrime’s solutions in addressing
cryptocurrency fraud?
7. How can we create a comprehensive regulatory framework for
cryptocurrencies that effectively addresses issues like
anti-money laundering (AML) and combating the financing of
terrorism (CFT)?
8. How can we explore the use of blockchain analytics and artificial
intelligence to identify patterns associated with cryptocurrency
fraud?
9. What strategies should be employed to highlight the importance
of investigating darknet marketplaces where cryptocurrencies
are commonly used for illegal purposes?
10.How can we effectively advocate for public awareness
campaigns to educate users about the risks and vulnerabilities of
using cryptocurrencies?
11.What measures can be implemented to strengthen legal
mechanisms for seizing and confiscating illicitly obtained
cryptocurrencies?
12.How can we allocate resources for research on emerging trends
in cryptocurrency fraud?
13.How crucial is it for the analysts to detect illicit addresses that
can conceal themselves?
14.How can the governments suppress the anonymity of crypto
assets for their crime investigation and funds confiscation?
VIII. POSSIBLE BLOCS:
Bloc 1:
- China, People’s Republic of
- United States of America
- Canada, Dominion of
- Luxembourg, Grand Duchy of
- French, Republic of
- United Kingdom
Bloc 2:
- Nigeria, Federal Republic of
- South Africa, Republic of
 - India, Republic of
- Singapore, Republic of
- Saudi Arabia, Kingdom of
- El Salvador, Republic of
- Japan

D. REFERENCES

1. UNODC. (n.d.). About UNODC. Retrieved February 22th, 2024,

from https://www.unodc.org/southernafrica/en/sa/about.html
2. European Commission Knowledge for Policy. (n.d.). UNODC -
United Nations Office on Drugs and Crime. Retrieved February
22th, 2024, from
https://knowledge4policy.ec.europa.eu/organisation/unodc-united-natio
ns-office-drugs-crime_en
3. UNODC. (n.d.). About UNODC. Retrieved February 22th, 2024,
from https://www.unodc.org/unodc/en/about-unodc/index.html
4. UNODC. (n.d.). SDGs. Retrieved February 22th, 2024, from
https://sdgs.un.org/goals
5. Wikipedia. (n.d.). United Nations Office on Drugs and Crime.
Retrieved February 22th, 2024, from UNODC - Wikipedia
https://en.wikipedia.org/wiki/United_Nations_Office_on_Drugs_and_
Crime
6. UNODC. (n.d.). CCPCJ Membership. Retrieved February 22th,
2024,
https://www.unodc.org/unodc/en/commissions/CCPCJ/CCPCJ_Membe
rship.html
7. What is cybercrime? (n.d) Proofpoint. Retrieved February 20th,
2024, from
https://www.proofpoint.com/us/threat-reference/cyber-crime
8. Rashi Maheshwari. What are crypto exchanges and how do they
work? (January 10th, 2024), Forbes. Retrieved February 20th,
2024, from
https://www.forbes.com/advisor/in/investing/cryptocurrency
/what-is-a-crypto-exchange
9. Crypto Crime Glossary, (n.d) Hudson Intelligence. Retrieved
February 20th, 2024, from
https://www.fraudinvestigation.net/cryptocurrency/glossary
10.New Analysis Finds Consumers Reported Losing More than $1
Billion in Cryptocurrency to Scams since 2021, (June 3th 2021)
Federal Trade Commisson. Retrieved February 20th, 2024, from
https://www.ftc.gov/news-events/news/press-releases/2022/
06/new-analysis-finds-consumers-reported-losing-more-1-billio
n-cryptocurrency-scams-2021
11.2024 Crypto Crime Trends from Chainalysis, (n.d) Chainalysis.
Retrieved February 20th, 2024, from
https://www.chainalysis.com/blog/2024-crypto-crime-report-i
ntroduction/
12.Cryptocurrency Regulations: How Governments Regulate
Cryptocurrency, (October 26th, 2021) Chainalysis. Retrieved
February 20th, 2024, from
https://www.chainalysis.com/blog/cryptocurrency-regulation-
explained/
13.Blockchain & Cryptocurrency Laws and Regulations 2024 |
USA, (n.d) Global Legal Insights (GLI). Retrieved February 20th,
2024, from
https://www.globallegalinsights.com/practice-areas/blockchai
n-laws-and-regulations/usa
14.Challenges and Techniques in Cryptocurrency Transaction
Monitoring, (n.d) Sanction Scanner. Retrieved February 20th,
2024, from
https://sanctionscanner.com/blog/challenges-and-techniques-i
n-cryptocurrency-transaction-monitoring-735
15.Jordan Adams. What Are the Challenges in Regulation of
Cryptocurrency? (August 31th, 2023), Doubloin. Retrieved
February 20th, 2024, from
https://www.doubloin.com/learn/regulation-challenges-crypto
-exchanges
16.Md. Imran Wahab. Crypto-currecny Crime Investigation:
Challenges, (n.d) Legal Service India: E-Journal. Retrieved
February 20th, 2024, from
 https://www.legalserviceindia.com/legal/article-13110-crypto-
currecny-crime-investigation-challenges.html
17.Ransomware attacks, a growing threat that needs to be
countered, (n.d) UNODC Regional Office for Southeast Asia and
the Pacific. Retrieved February 20th, 2024, from
https://www.unodc.org/roseap/en/2021/10/cybercrime-ranso
mware-attacks/story.html
18.UNODC launches training to tackle cryptocurrency-enabled
Organized Crime, (May 8th, 2017), United Nation Office on
Drugs and Crime (UNODC). Retrieved February 20th, 2024,
from
https://www.unodc.org/unodc/en/frontpage/2017/May/uno
dc-launches-training-to-tackle-money-laundering-and-bitcoin-ba
nking-fraud.html
19.Global Programme against Money Laundering, (n.d) United
Nation Office on Drugs and Crime (UNODC). Retrieved
February 20th, 2024, from
https://www.unodc.org/unodc/en/money-laundering/global-
programme-against-money-laundering/.html
20.Shaping an international response against the criminal misuse of
cryptocurrencies, (October 27th, 2023) Europol. Retrieved
February 20th, 2024, from
https://www.europol.europa.eu/media-press/newsroom/new
s/shaping-international-response-against-criminal-misuse-of-cr
yptocurrencies
21.Cryptocurrency crime: preventing the misuse of virtual assets by
organized crime for money laundering, (December 9th, 2021)
INTERPOL. Retrieved February 20th, 2024, from
https://www.interpol.int/en/News-and-Events/News/2021/C
ryptocurrency-crime-preventing-the-misuse-of-virtual-assets-by-
organized-crime-for-money-laundering
22.Allison Owen. Crypto, Crime and Compliance in Latin America,
(October 7th, 2022) RUSI Newsbrief. Retrieved February 20th,
2024, from
https://www.rusi.org/explore-our-research/publications/rusi-
newsbrief/crypto-crime-and-compliance-in-latin-america
 23.Sara Mosqueda. Follow the Money: How Digital Currency is
Changing Crime, (August 21st, 2023) Advancing Security
Worldwide ®. Retrieved February 20th, 2024, from
https://www.asisonline.org/security-management-magazine/a
rticles/2023/08/cryptocurrency/How-digital-currency-changes-
crime/
24.Connecting the Dots: Misuse of New Payment Methods, Virtual
Assets, and Social Media in Money Laundering and Financing
Terrorism (2023) UNODC ROP. Retrieved March 17th, 2024,
from
https://www.unodc.org/romena/en/Stories/2023/December/
connecting-the-dots_-misuse-of-new-payment-methods--virtual-
assets--and-social-media-in-money-laundering-and-financing-te
rrorism.html
25.UNODC Launches Training to Tackle Money Laundering and
Bitcoin Banking Fraud (2017) UNODC Frontpage. Retrieved
March 17th, 2024, from
https://www.unodc.org/unodc/en/frontpage/2017/May/uno
dc-launches-training-to-tackle-money-laundering-and-bitcoin-ba
nking-fraud.html
26.Side Event on Investigation of Money Laundering and Terrorist
Financing with Cryptocurrencies (n.d) UNODC CrimJust.
Retrieved March 17th, 2024, from
https://www.unodc.org/unodc/en/drug-trafficking/crimjust/
news/side-event-on-investigation-of-money-laundering-and-ter
rorist-financing-with-cryptocurrencies.html
27.Cryptocurrencies and Darknet Investigations (2022) UNODC
ROSEAP. Retrieved from
https://www.unodc.org/roseap/en/2022/02/cryptocurrencies-
darknet-investigations/story.html

E. CREDITS

This background guide is written by the following Chairpersons

and Content Developers of CHT Model United Nations - United
Nations Office on Drugs and Crime (UNODC):
1. Thuy Linh, Le, member of Specialist Department of NEUMUN,
student at Nguyen Hue high school for the gifted, Hanoi,
Vietnam;

2. Ba Thinh, Phan, member of the Specialist Department of PMU,

student of Phan Boi Chau High School for the Gifted, Vinh,
Nghe An;

3. Khanh Linh, Nguyen, member of the Content department of

PMU, student at Phan Boi Chau high school for the gifted, Vinh
city, Vietnam;

4. Bao Chau, Bui Ngoc, Member of the Content department of

CHTMUNC, student at Ha Tinh high school for the gifted, Ha
Tinh city, Vietnam;

5. Thi Le Ngan, Tran, Member of the Content department of

CHTMUNC, junior at Phan Dinh Phung high school, Ha Tinh
city, Vietnam;

6. Minh Quan, Tran, Member of Content Department of

CHTMUNC, student at Ha Tinh high school for the gifted, Ha
Tinh city, Viet Nam.