The nexus between blockchain distributed ledger technology and financial crimes

https://doi.org/10.35912/ijfam.v4i1.815
Published: Jun 10, 2022

Abstract:

Purpose: The study sought to uncover the effect of blockchain digital ledger technology (BCDLT) on financial crimes. The study was driven by the need to promote blockchain technology in a bid to enhance financial sanity through elimination of financial delinquency.

Research methodology: The study followed a quantitative paradigm using an explanatory research design. The study targeted financial executives, senior staff members at the Zimbabwe stock exchange, bankers and officials from the financial regulators. Data was collected using a structured questionnaire.

Results: The study found out that of the four independent BCDLT antecedents, manual audit costs were insignificant, whereas the other three had strong positive associations with financial crime reduction.

Limitations: The study targeted a specific group of financiers; hence the results may not be universal to other excluded categories

Contribution: The study significantly guides policy formulation and laws in line with the adoption of the blockchain technology in the global financial system to guard against the possibility of new forms of financial crimes that could emanate from the use of technology.

Keywords:
1. Blockchain digital ledger technology
2. Financial crime
3. Financial performance
Authors:
1 . Newton Chinyamunjiko
Department of Accounting and Finance, Midlands State University, Gweru, Zimbabwe
2 . Forbes Makudza
Department of Business Management, Manicaland State University of Applied Sciences, Mutare, Zimbabwe
3 . Lucia Mandongwe
Department of Accounting, Manicaland State University of Applied Sciences, Mutare, Zimbabwe
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How to Cite
Chinyamunjiko, N. ., Makudza, F., & Mandongwe, L. (2022). The nexus between blockchain distributed ledger technology and financial crimes. International Journal of Financial, Accounting, and Management, 4(1), 17–30. https://doi.org/10.35912/ijfam.v4i1.815
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Issue & Section
Vol. 4 No. 1 (2022): June
Articles
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This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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  2. European Parliament. (2018). Cryptocurrencies and blockchain: Legal context and implications for financial crime, money laundering and tax evasion. European Parliament.
  3. George, D., & Mallery, P. (2016). IBM SPSS statistics step by step: A simple guide and reference. 14th edition. New York, Routledge. Doi:10.4324/9781315545899.
  4. Gilmore. L. (2017). Reinventing the World of Banking. Mckinesy Inc, Bucharest, Romania.
  5. Gottschalk, P. (2010). Categories of Financial crime. Journal of Financial Crime, 17(4), 441 - 458.
  6. Hanni. L., & Kalin, E. (2013), Stock Market Offenses and Abuse, Zurich.
  7. Harvard Law School. (2020). Anti-Money Laundering and Blockchain Technology. Harvard University, Cambridge, USA.
  8. Huang, C., & Trangle, A. (2020). Anti-Money Laundering and Blockchain Technology. Harvard University, Cambridge, USA.
  9. International Bank for Reconstruction and Development/ the World Bank. (2017). Distributed Ledger Technology (DLT) and Blockchain.
  10. International Federation of Accountants (IFAC), (2018). Blockchain: Impact on Business, Finance and Accounting. Global Knowledge Gateway, IFAC.
  11. International Finance Corporation. (2021). Blockchain: Opportunities for Private Enterprises in Emerging Markets. IFC, World Bank Group.
  12. International Finance Corporation. (2017). Blockchain in Financial Services in Emerging Markets. IFC, World Bank Group.
  13. International Finance Corporation. (2017). Blockchain Opportunities for private Enterprises in Emerging Markets. IFC, World Bank Group.
  14. International Monetary Fund. (2021). Fight-Against-Money-Laundering-the-Financing-of-Terrorism. IMF Pubication.
  15. INTERPOL. (2021). Crimes/Financial-crime. Interpol International.
  16. Jung, J., & Lee, J. (2017). Contemporary Financial Crime. Journal of Public Administration and Governance, 7(2), 88-97.
  17. Liu. M. & Xu. J. (2019). How will blockchain technology impact auditing and accounting: permissionless versus permissioned blockchain. American Accounting Association, America
  18. Mantelaers. E., Zoet. M. & Smit. K. (2019). The impact of blockchain on the auditor’s audit approach. International Journal of Software and e-Business.
  19. Microsoft, (2018). 5 Ways Blockchain is Transforming Financial Services, A new approach to brokering trust. Microsoft.
  20. Niforos. M. (2017). Blockchain in Financial Services in Emerging Markets-Current Trends. IFC, World Bank Group.
  21. Pallant, J. (2005). SPSS survival guide: A step by step guide to data analysis using SPSS for windows. 3rd Edition. Open university Press, New York.
  22. KPMG. (2018). Clarity on Financial Crime in Banking Part I: Current Trends. KPMG, Switzerland
  23. Polyviou. A., Velanas. P., & Soldatos. J. (2019). Blockchain Technology: Financial Sector Applications Beyond Cryptocurrencies. MDPI, Basel, Switzerland.
  24. Rawat, D. B., & Doku, R. (2020). Blockchain technology: emerging applications and use cases for secure and trustworthy smart systems. Journal of Cybersecurity and Privacy, 1, 4 – 18.
  25. Rigsby. J. H. (2016). Virtual Currency, Blockchain Technology, and EU Law: The “Next Internet” in AML/CFT Regulation’s Shadow. Lund University
  26. SestremOchôa, I., Reis, V., Calbusch, L., De Paz Santana, J., DelcioParreira, W., OrielSeman, L., & Zeferino, C. (2021). Performance and Security Evaluation on a Blockchain Architecture for License Plate Recognition Systems. Appl. Sci., 11(1), 1-20.
  27. Shrema, N. (2020). Detecting multicollinearity on regression analysis. American Journal of Applied Mathematics and Statistics, 8(2), 39-42. Doi:10.12691/ajams-8-2-1.
  28. Statista. (2021), Types of economic crime reported worldwide in 2016. Statista Research Department, Switzerland.
  29. UK’s Financial Services and Markets Act. (2000).London, UK.
  30. United Nations Office on Drugs and Crime (2005). Crime and Development in Africa. United Nations.
  31. United Nations Office on Drugs and Crime. (2021). United Nations Office on Drugs and Crime. https://dataunodc.un.org/data/crime/fraud
  32. Violeta, A. M., Vaidean, V. L., Borlea, S. N., & Florescu, D. R. (2021). The Impact of the Development of Society on Economic and Financial Crime. Case Study for European Union Member States. Risks, 97, 1-20.
  33. Wadey. E. (2019). A-Z of Financial Crime in Africa: The What, Why and How to Tackling Financial Crime in Africa. Temenos, Netguardians.
  34. Zarpala. L., & Casino. F. (2020). A Blockchain-Based Forensic Model for Financial Crime
  35. Investigation: The Embezzlement Scenario. Digital Finance Journal. Doi.org/10.1007/s42521-021-00035-5.