While it’s true that many criminals have flocked to cryptocurrency for its seeming anonymity and availability outside of highly regulated financial ecosystems, digital assets are not fueling a rise in financial crime. Fraud, money laundering, bribery, dark markets, illicit financing and corruption have been a part of nearly every society for centuries, and fiat has been used extensively to these ends.

The key is to be prepared to prevent, investigate and remediate fraud, money-laundering and other crimes involving cryptocurrency, but not to presume ecosystems using digital assets are at a significantly higher risk than traditional financial systems.

Contrary to popular opinion that cryptocurrency transactions are undetectable, digital forensics specialists who know where and how to look can often find, determine ownership and sometimes recover funds in the cryptocurrency ecosystem much easier than can be done for crimes committed using cash and wire transfers. Due in part to the ‘digital ledger’ implementation of blockchain technology, investigators may use software tools, along with information obtained via KYC (Know Your Customer) protocols and traditional forensic methods to search, review and analyze the origination and transaction activity of digital wallets and cryptocurrencies to determine facts around fraudulent behavior, conduct internal investigations, reclaim stolen funds and more.

When operating within an exchange or platform that follows best practice security and privacy guidelines, transactions using digital assets are just as secure as any other platform that follows the same practices. No ecosystem is immune to security vulnerabilities or breaches, but most mainstream cryptocurrency platforms utilize robust security controls, including but not limited to encryption of digital wallet keys and multi-factor authentication, to protect their customers’ accounts.

There are also options to store digital assets offline in “cold storage,” which helps avoid compromise attempts, as an added security measure.