This week Botswana Police Service officials revealed that they currently have zero cases recorded involving cryptocurrency illicit financial transactions, due to a lack of capacity.
This swims against the tide of alarms raised by the financial intelligence authority on the continual risk of financial terrorism that may be mushrooming below the radar of local authorities.
The shocking revelation from local authorities came in the same week as hackers thought to be working for the North Korean regime successfully converted at least $300m of their record-breaking $1.5bn crypto heist to unrecoverable funds siphoned to untraceable accounts.
Speaking on Wednesday at Stanbic Botswana’s virtual assets financial compliance conference, police sub-inspector, Kerapetse Kabalano revealed that as the authority tasked with all criminal investigations in the country, they were battling to carry out investigations.
“We have a problem of identifying actual transactions happening online with data privacy being used to obscure transaction details,” he said.
The zero cases the BPS says it has are not the result of the country having clean hands, but rather a result of authorities being incapacitated to track and monitor these crimes from the online financial world.
This means that dubious financial payments and scams are possibly made online in Botswana via virtual assets, such as cryptocurrencies, and it is hard for local authorities to even know the culprits and actors in these transactions.
Adding to the frustrations of the BPS, Fintech Manager at the Non-Banking Financial Regulatory Authority (NBFIRA), Kagiso Mochabaki said that it was tough to decode and detect illicit movements of digital assets because of the anonymity maintained at the head and tail ends of transactions.
“Virtual assets by nature are decentralised and they do not function under one system. “They work across different legal regimes and jurisdictions, making it even harder to track use of funds and intentions,” he said
Virtual asset crimes are also hard to track because they frequently happen in a layer of the internet called the Dark Web. This is an encrypted portion of the internet not visible to the general public via traditional search engines such as Google. Also known as the Darknet, the dark web constitutes a large part of illegal activity on the internet.
Botswana, having survived a three-year global money-laundering greylist censure that had impacted Botswana’s investment climate from 2018 to 2021, cannot afford another sanction from ineffective investigations, analysts said.
