Be wary of virtual currencies used for online criminality- EUIPO, IPOPHL

With the meteoric rise of virtual currencies as a means of exchange and trade on the internet, an intellectual property expert from the European Union Intellectual Property Office (EUIPO) is warning of its downsides - including its use to facilitate payment for infringing goods and products. 

“If there is one thing that has taken off in the last year - one tendency, one new trend  that is the turning over the world, it is the use of virtual currencies: the virtualised, decentralised payments between anonymous wallets on the internet,” said Mr. Erling Vestergaard, Seconded Danish Prosecutor, at the European Observatory of Infringement of Intellectual Property Rights, EUIPO.

This is as the IPOPHL highlights the increasing difficulty to clamp down on infringing activities online, and moreso with the advent of new technology. 

“Online infringements pose serious and alarming threat to legitimate businesses and put consumer health at risk. Addressing online infringements is a big challenge to us, because of the complexities, unpredictability and highly advanced technologies employed in the sale of counterfeit goods and products via the internet,” said IPOPHL Deputy Director General Teodoro C. Pascua, during the workshop. 

According to Mr. Vestergaard, the very nature of virtual currencies that lend a shield of anonymity on payment makes it an effective tool for criminality. 

“Web services and web shops selling products that infringe on intellectual property now give an option for Bitcoin as payment, along with Visa, Mastercard, and Paypal,” said Mr. Vestergaard.

Virtual currencies are issued and regulated by their developer, out of reach of the supervision of government central banks. Bitcoin is but one type of virtual currency; there are more than 1,400 virtual currencies being used on the Internet. 

Digital currencies have become a medium to pay transactions done on the ‘dark web’. 

According to Mr. Vestergaard, the way to battle technology-enabled criminality is to use the same weapon against infringers. 

“Big data and analytics that lead to more effective tracking and monitoring can be applied by law enforcement, in response to these challenges,” Mr. Vestergaard said. 

The immediacy and speed of illegal activities done through the internet also demands an equally swift response but one that requires cross-border cooperation.

“In the digital environment, if evidence needs to be produced in another country. There must be international cooperation mechanisms in place to gather evidence in a matter of twenty-four hours. The evidence must be produced as quickly as possible. This is the way to go if we want to be more effective,” Mr. Vestergaard added.