As more transactions use cryptocurrency, the public should become digitally literate to guard against scams, authorities say.
The accelerated growth of cryptocurrencies such as bitcoin have attracted public interest, but few people have taken the time to learn about cryptocurrencies or blockchain technology, said Bhume Bhumiratana, a consultant at the Securities and Exchange Commission, during a seminar titled "Advancing the Economy and Combating Crime in the Digital Age of Cryptocurrency and Crime", hosted by Thailand Institute of Justice (TIJ) and the UN Office on Drugs and Crime (UNODC).
"Blockchain is the second wave of the internet. It helps decentralise data access and allows people to connect with others in privacy," Mr Bhume said. "However, both the internet and blockchain do not solve phishing and scams as these technologies only allow people to exchange information at a lower cost and without a middleman."
Technologies cannot regulate people who intend to commit fraud, but regulators can supervise middlemen such as digital exchanges, brokerage firms, digital token dealers and initial coin offering portals via Know-Your-Customer rules, a verifying process for business clients to determine potential risks and illegal intentions, he said.
Prinn Panitchpakdi, country head of CLSA Securities Thailand, said laws and regulations cannot solve people's greed as they search for higher returns, so making the public digitally literate is a good approach to prevent cryptocurrency scams.
It is time to think seriously about which government agency will be the central body for digital knowledge, Mr Prinn said.
Alexandru Caciuloiu, cybercrime project coordinator at the UNODC, said cryptocurrencies can also be used for other crimes such as ransom payment, money laundering, payment for illegal goods and drugs on the dark web, and terrorism financing because blockchain is anonymous.
There have been several cases associated with cryptocurrencies and crimes since 2014, such as AlphaBay, which was a major online darknet market. Its founder was charged by the Eastern District of California for several crimes such as racketeering, money laundering, narcotics and identity theft, Mr Caciuloiu said.
Pol Lt Col Narin Phetthong, a specialised officer with Interpol, said bitcoin worth around 400 million baht was seized in the AlphaBay case, showing how cryptocurrencies have been used for illegal activities.
"Around 80% of darknet transactions are related to using bitcoin as payment for drugs," Pol Lt Col Narin said.
Although the global police network has been working together on crimes linked with using cryptocurrencies as a medium of payment, the biggest concern is how less than 50% of global digital exchanges are not regulated, he said.
A ban imposed on digital currency transactions in certain countries leads these transactions being conducted in the shadows, allowing criminals to use these channels to commit crimes, Pol Lt Col Narin said.
Pol Col Pisal Erb-Arb, deputy commander of the Narcotics Suppression Bureau, said Thailand should ask itself whether the country needs an agency capable of dealing with investigation and arrest of cybercriminals.
"Online sales of narcotics will eventually happen. We should prepare for foreign drug dealers sending narcotics here via digital currency transactions," Pol Col Pisal said. "If narcotics law enforcement is not prepared for this, then the evidence related to drugs must be clear to convict someone. The [drug] trade conducted via blockchain can be traced, but the people cannot be traced."
Prosecution of cybercriminals, prosecution of drugs and contraband, and seizure of criminal assets are three factors Thailand should prepare laws for as cryptocurrency use rises, he said.
Witthaya Neetitham, secretary of the Anti-Money Laundering Office, said the office has been preparing for a rise in cryptocurrency crimes in terms of legal measures, internal restructuring and setting up an auxiliary agency to assist with cybercrimes.
Preparation for seizure of e-wallets in case criminals do not reveal access codes is also needed, as most criminal activities related to cryptocurrencies in Thailand are associated with fraud, Mr Witthaya said.
Professions with risk exposure for cybercrimes should be regulated, along with those working in the informal sector, he said.
