Effective Asset Recovery in the Western Balkans Amidst the Rise of Crypto Assets
Published on: June 18, 2023
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As the digital era evolves, so do the challenges faced by the judiciary and law enforcement agencies. Blockchain and crypto assets have revolutionised financial transactions in the Western Balkans and globally, making the understanding and effective recovery of assets related to crypto-enabled crimes that much more crucial. So, what steps do judiciary and law enforcement agencies in the Western Balkans need to take in order to stay on track and effectively recover digital property used to commit crime or that is result of crime?

Vahidin Đaltur, digital forensic expert witness of the Banking Agency of the FBiH in Bosnia and Herzegovina, points out that “in the past, hackers and money launderers could effortlessly channel stolen cryptocurrency back into the economy”.

“However, significant advancements in monitoring techniques and cutting-edge technologies have emerged to track and “catch” suspicious transactions. The growing expertise of investigators and crypto-forensic analysts has substantially combated the tactics employed by criminals to hide their blockchain transactions”, he explained.

To effectively tackle the challenges of crime in the digital era, the region needs modern solutions, and luckily Western Balkans does indeed have highly trained IT experts.

“Special emphasis should be placed on fostering close cooperation and coordination between IT experts and financial investigation experts in order to develop legal and procedural frameworks to combat the use of crypto assets as a means to conceal unlawfully acquired assets.”, said Balša Savić, forensic expert for digital evidence of the Special Prosecutor’s Office of Montenegro.

“Looking ahead, the most pressing obstacle for law enforcement agencies is to motivate and retain IT experts, as the private sector offers significantly better working conditions.”, explained Đaltur.

Crypto assets offer potential benefits, such as faster and more efficient transactions, enhanced privacy, and increased accessibility. However, their digital and decentralised nature also poses challenges. They can be used for criminal activities, such as money laundering or purchasing illegal goods and services, due to the relative anonymity they provide. The Western Balkan countries find themselves at the forefront of these challenges, as crypto assets have gained popularity in financial markets and services within the region.

“Cryptocurrencies are increasingly in use, which has opened up new challenges for both lawmakers and practitioners. In order to have a successful digital asset seizure, confiscation and re-use, we need regulations, crypto wallets and educations for judicial and police actors”, said Lejla Kurtanović, prosecutor of the Prosecutor’s Office of Canton Sarajevo in Bosnia and Herzegovina.

“To effectively address the potential challenges posed by crypto-assets and cryptocurrencies to the judicial systems of Western Balkan countries, which have become prominent in financial markets and services, it is crucial that all stakeholders in the security, financial, and judicial sectors cooperate”, explained Savić.

Main finding presented in this article were derived from the panel discussion “New Challenges: Crypto assets – approach of lawmakers and practitioners in Western Balkans”, which was held during the annual alumni conference Effective Asset Recovery in the Western Balkans on 15th and 16th of March 2023 in Sarajevo. The conference was held as part of the project “Combating corruption and organised crime in the Western Balkans through strengthening regional cooperation in asset recovery”, implemented by the AIRE Centre and Regional Anti-Corruption Initiative – RAI and supported by the UK Government. Find out more at Asset Recovery Platform.