Cy­ber­crime surges above $120-bn in South­east Asia



THE RAPID growth of Bit­coin-re­lated scams and other cy­ber­crimes has prompted the United Na­tions to urge mem­ber coun­tries, in­clud­ing Thai­land, to step up their le­gal safe­guards against po­ten­tial eco­nomic losses.

Cy­ber­crime-re­lated losses world­wide top US$600 bil­lion (Bt19.6 tril­lion), said Julien Garsany, deputy re­gional rep­re­sen­ta­tive of the UN Of­fice on Drugs and Crime (UNODC).

Garsany told a Bangkok sem­i­nar on cryp­tocur­rency and cy­ber­crime that the cost of eco­nomic and other dam­age to Asean coun­tries alone ranges be­tween $120 mil­lion and $200 mil­lion, mak­ing it es­sen­tial for law-en­force­ment and jus­tice of­fi­cials in var­i­ous coun­tries to work to­gether to tackle the is­sue.

Thai­land has also won sup­port from the in­ter­na­tional com­mu­nity af­ter an ex­ec­u­tive de­cree was is­sued re­cently to reg­u­late all dig­i­tal as­sets, in­clud­ing Bit­coin and ini­tial coin of­fer­ings (ICOs).

Kit­tipong Kit­ta­yarak, ex­ec­u­tive di­rec­tor of the Thai­land In­sti­tute of Jus­tice, said crim­i­nals have now turned to us­ing cryp­tocur­ren­cies to com­mit crimes such as money laun­der­ing, ter­ror­ism fi­nanc­ing and il­licit ransom pay­ments. They also use cryp­tocur­ren­cies to pay for child pornog­ra­phy, mal­ware, nar­cotics, weapons and hu­man traf­fick­ing via the so-called “darknet”, whose com­puter server lo­ca­tions are un­known.

The num­ber of cryp­tocur­rency crimes in Thai­land re­mains small so far but is ex­pected to in­crease rapidly in the near fu­ture. The coun­try needs to boost public aware­ness and readi­ness to tackle this is­sue, Kit­tipong said.

Jus­tice Min­is­ter ACM Pra­jin Chan­tong told the sem­i­nar that a short­age of ex­perts in this field means Thai­land needs to ex­pand its col­lab­o­ra­tion with other coun­tries.

Dr Narin Phet­thong, an Interpol spe­cial­ist on crim­i­nal ac­tiv­ity in­volv­ing cryp­tocur­ren­cies, said the most prom­i­nent cases in Thai­land in­cluded a huge Bit­coin rob­bery in Phuket al­legedly car­ried out by Rus­sian crim­i­nals and the Bt800-mil­lion Bit­coin scam in which a Fin­nish owner of bit­coins was al­legedly cheated by Thais.

Alexan­dru Caci­u­loiu, the UNODC’s cy­ber­crime project co­or­di­na­tor, said crim­i­nal ac­tiv­ity in­volv­ing cryp­tocur­rency could take many forms, in­clud­ing their use by pros­ti­tu­tion rings to laun­der money and crypto-hack­ing in which com­puter servers are ac­cessed without au­tho­ri­sa­tion to mine Bit­coins and other dig­i­tal units.

Re­gional op­er­a­tion

Narin said Interpol now has a re­gional op­er­a­tion in Sin­ga­pore with a unit ded­i­cated to cy­ber­crimes in Asean coun­tries. Ow­ing to con­cerns on the ex­pected rise of these crimes, Thai­land’s Se­cu­ri­ties and Ex­change Com­mis­sion ( SEC) is now tasked with reg­u­lat­ing all dig­i­tal as­sets in the coun­try.

Bhume Bhu­mi­ratana, a con­sul­tant of SEC, said li­cens­ing and regis­tra­tion with the au­thor­i­ties is now re­quired for sev­eral types of busi­ness in­volv­ing dig­i­tal as­sets, in­clud­ing cryp­tocur­rency ex­changes, deal­ers and bro­kers. Such reg­u­la­tor over­sight could help pre­vent fraud and other wrong­do­ing, Bhume added.

Pre­ven­tive mea­sures such as li­cens­ing and “know your cus­tomer” (KYC) reg­u­la­tions im­posed on banks and other fi­nan­cial in­sti­tu­tions will al­low the au­thor­i­ties to trace own­ers of dig­i­tal as­sets used in crim­i­nal ac­tiv­i­ties.

Po­ramin In­som, founder of the Zcoin and TDAX cryp­tocur­rency ex­changes in Thai­land, said only 0.2 per cent of the Thai pop­u­la­tion cur­rently use Bit­coins and sim­i­lar cur­ren­cies. He pre­dicts that fig­ure will grow 10 per cent over the next five years.

Po­ramin said the cur­rent reg­u­la­tions on all dig­i­tal as­sets are good for the coun­try and po­ten­tial users, as well as in­vestors who want to know the rules to avoid prob­lems with reg­u­la­tors.

How­ever, au­thor­i­ties must avoid over­reg­u­lat­ing dig­i­tal as­sets and other new tech­nolo­gies as Thai in­no­va­tors could be neg­a­tively af­fected, cau­tioned Prin Pan­itch­pakdi, a mem­ber of SET’s board of gov­er­nors and di­rec­tor of Na­tional In­no­va­tion Agency.

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