05/03/2024
By Karen Mullins

The School of Criminology and Justice Studies is proud to announce a Dissertation Proposal Defense by Lauryn J. Krebs entitled "The Threat of Cyber-Laundering: An Evaluation of the Security Landscape and Vulnerability of Crypto Exchanges."

Date: Monday, May 20, 2024
Time: 10 to 11:30 a.m.
Location: HSSB Room 431


Committee:

  • James Forest, Ph.D., Chairperson
  • Emily GreeneColozzi, Ph.D.
  • Claire Lee, Ph.D.
  • Amber Ruf, Ph.D.

Abstract: Money laundering is a critical activity for any criminal organization, who must first disguise the illegitimate origins of their profits to later spend them. However, new innovations in money laundering have made the process even easier and more difficult for law enforcement to identify through increased layers of anonymity. One such innovation has been dubbed “cyber-laundering,” which involves the use of cryptocurrencies in money laundering. Cyber-laundering occurs in the context of the crypto exchange, the online money exchange businesses where individuals can exchange between fiat currency and cryptocurrencies. Cyber-criminals take advantage of security weaknesses within crypto exchanges to pseudonymously engage in the layering of illicitly obtained profits through various cryptocurrency transactions, and end with laundered fiat profits to continue their operations. This is of concern for both law enforcement (who do not want the continuation of criminal activity) and the crypto exchanges (who do not want to be held legally liable for that criminal activity). While there has been growing calls for legislation regarding the regulation of crypto exchanges, the crypto exchanges and regulatory bodies have been at odds: while regulatory bodies want to impose more stringent policies, the crypto exchanges want to promote a freer economy for monetary trade and thus feel as though they are being punished for the actions of these cyber-criminals (Wright 2023). Nevertheless, in the shadow of this debate is the question of how to prevent the threat of cyber-laundering. This dissertation proposal seeks to investigate this threat by understanding the security landscape of crypto exchanges, including what regulations are currently imposed upon crypto exchanges, issues of compliance surrounding these regulations, and attitudes towards both issues of compliance and regulation. The goal of this dissertation proposal is to develop an analytical framework through the lens of situational crime prevention that can be used to assess the vulnerability of crypto exchanges to cyber-laundering.