Australian Securities and Investment Commission says it needs more powers to combat financial crime

This article is more than 2 years old

This article is more than 2 years old

The corporate watchdog wants new powers for its investigators to go undercover to combat financial crime on the dark web.

The Australian Securities and Investment Commission has said it needs more investigatory powers because the increasing use of the dark web and virtual currencies such as bitcoin has facilitated financial crime.

These include powers to operate and secure electronic devices, for investigators to take “assumed identities”, and to gain access to phone tap materials to help prosecute serious offences.

The reform calls are included in Asic’s submission to a parliamentary inquiry examining the impact of new information and communications technology on law enforcement.

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Asic said it was “committed to supporting innovation” but developments in technology “can create risks for new forms of financial crime and pose a number of challenges” to its law enforcement capabilities.

It warned the dark web enabled criminals to anonymously buy and sell malicious software and gain access to hacking services and bank account information.

“Some of these activities occur within closed internet forums which require both sellers and purchasers to have demonstrated trust or reputation with forum administrators and users before being provided with access,” it said.

In July Guardian Australia reported a darknet trader was illegally selling the Medicare patient details of any Australian on request by “exploiting a vulnerability” in a government system.

Asic said it was developing machine-learning techniques and artificial intelligence to help scour the dark web, but asked for the ability to go undercover “to gain trust to access closed dark web forums”.

It also called for the power to obtain and share telecommunications data with its foreign counterparts to help investigate dark web activity facilitated by actors located overseas.

Asic asked for an expansion of search warrant powers so it can apply for a warrant without first notifying a suspect, and which would allow it to search, seize and copy documents on electronic devices.

At present, Asic can seize electronic devices with search warrants issued under the Crimes Act but evidence gathered can only be used in criminal cases, not civil proceedings.

On Monday the Australian reported Asic also plans to use undercover shoppers to test Australia’s mortgage brokers and adherence to lending standards in the $1.7tn home loan system.

In 2017 UBS banking analyst Jonathan Mott warned that as much as $500bn of Australia’s housing debt is “liar loans”, based on factual inaccuracies about a borrower’s ability to pay back loans.

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A related survey found mortgages originating with brokers were statistically significantly more likely to misrepresent their information than mortgages originated by banks.

Borrowing through mortgage brokers has increased in recent years and Asic has found broker loans were on average larger and had higher loan-to-valuation ratios, which require smaller deposits, than loans provided through banks.

“As part of our ongoing review of mortgage broking practices, we are undertaking consumer and broker research to better understand the home loan purchase process,” an Asic senior executive Michael Saadat, told the Australian.



He said Asic wanted to find out which factors, aside from commissions, led to people being sold different types of mortgages and how brokers’ behaviour could improve lending standards.