Fighting Tech-Fueled Crime

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Authorities must respond as digital tools accelerate financial crime.
CHADY EL KHOURY is assistant general counsel in the IMF’s Legal Department.
Opinions expressed are those of the author; they do not necessarily reflect IMF policy.
The Department of Justice announced the largest-ever US crypto seizure: "$225 million" from pig butchering crypto scams.
The DOJ investigation tracked thousands of wallets used to scam "more than 400 victims."

Annual illicit crypto activity growth has averaged "about 25 percent" in recent years and may have surpassed "$51 billion last year," according to Chainalysis.
Common technologies and tactics used by criminals:
- AI-generated profiles and identities.
- Encrypted messaging apps for coordination and concealment.
- Obscured blockchain transactions and decentralized exchanges.
- Stablecoins and lightly regulated virtual asset platforms to hide bribes and embezzled funds.
- AI-enabled impersonation, voice-cloning, fake-document generators, deepfakes, and bots to deceive banks and evasion of controls.
Traditional modalities remain important:
- Money laundering still relies on banks, informal money changers, and cash couriers.
- Criminals combine old and new methods to thwart detection.

Enforcement lags as criminals rapidly adapt and pick best tools for schemes.
Jurisdictional barriers, legacy systems, underresourced agencies, and procedural constraints impede cross-border investigations.
Antiquated correspondent banking networks can obscure and delay transactions, raising costs and creating oversight gaps.
Delays in implementing the FATF’s “travel rule” hinder timely identification of originators and beneficiaries in cross-border transfers.
Tracking proceeds from organized crime is nearly impossible for agencies lacking technological capacity and resources.

Regional and national innovations illustrate tradeoffs between inclusion/efficiency and AML/CFT risks:
- Singapore and Thailand linked fast payment systems enabling real-time retail transfers using mobile numbers.
- Indonesia and Malaysia connected QR codes for cross-border payments.
- India’s Unified Payments Interface enables seamless transfers across apps and platforms, with "more than 18 billion monthly transactions" demonstrating scale from interoperability.
FATF actions:
- An FATF June recommendation requires originator and beneficiary information for cross-border wire transfers—including those involving virtual assets—to enhance traceability.
IMF work on “safe payment corridors”:
- Focuses on transparency, interoperability, and risk-based regulation to preserve access while maintaining financial integrity.
- A pilot with Samoa showed how targeted safeguards and collaboration with regulated providers can preserve remittances access without disrupting new payment platforms.

Several countries, with IMF guidance, are investing in machine learning to detect anomalies in cross-border financial flows.
Governments are:
- Investing in capacity to trace crypto transfers and tightening regulation of virtual asset service providers.
- Employing blockchain analytics firms to assist investigations.
Legal and supervisory needs:
- Legal frameworks must adapt to enable timely access to digital evidence while preserving due process.
- Supervisory models should evolve to oversee banks and nonbank financial institutions offering cross-border services.
- Regulators and fintechs should partner; multilateral engagement should promote fast, cheap, transparent, and traceable cross-border payments anchored in interoperable standards that respect privacy.
Institutional investments and partnerships:
- Invest in regulatory technology, such as AI-powered transaction monitoring and blockchain analysis.
- Equip agencies with tools and expertise to detect complex crypto schemes and synthetic identity fraud.
- Hire and retain data scientists and financial crime specialists.
- Bring virtual assets under AML/CFT regulation.
- Promote public-private partnerships to codevelop tools to spot emerging risks.
- Back FATF and Financial Stability Board global standards with national investments in effective AML/CFT frameworks.

Fragmented and uneven responses leave openings for criminals and can undermine financial integrity.
Growing technological advantage of criminals over governments threatens to:
- Destabilize economies.
- Weaken fragile institutions.
- Erode public trust in safety and fairness systems.
The piece emphasizes that governments cannot wait while criminals continue to adopt and adapt emerging technologies.

A podcast with IMF assistant general counsel Chady El Khoury discusses how the anonymity of virtual currency transactions is supercharging criminals’ ability to grow their empires.

Fighting Tech-Fueled Crime, CHADY EL KHOURY, September 2025

Fighting Tech-Fueled Crime
- Fighting Tech-Fueled Crime (Markdown version)
- Fighting Tech-Fueled Crime (PDF)