The purpose of this manual is to provide practical information for investigators and prosecutors on the detection, investigation, prosecution, and seizure of crime proceeds laundered through the use of virtual currencies.
The purpose of this chapter is to provide a general overview of the history and concepts of electronic money and virtual currencies. The information contained in this chapter is important background material that forms the basis and context for the modules that follow.
To understand the genesis of virtual currencies, a brief history of virtual currencies is provided, including some of the most famous examples of virtual currencies and virtual currency exchanges. This is followed by definitions of the key terms used throughout these modules and relevant legal definitions. Providing clear definitions helps to refine the scope of the discussion and prevent miscommunication and confusion. A description of some of the more common types of electronic money and virtual currencies is then provided, including a categorization model for virtual currencies.
From an investigative point of view, it is very important to understand the interfaces between electronic money, virtual currencies, and the traditional financial system. Some of the most common interfaces are discussed, and finally, the current state of legal regulation of virtual currencies is provided.