Cryptocurrencies Pose Regulatory Risk for Casinos in Asia, Says Ex-Police Chief?

Posted on: January 12, 2018, 03:00h. 

Last updated on: January 12, 2018, 02:52h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Cryptocurrencies are bad news for Asia’s casinos and gaming companies that flirt with them should expect a regulatory backlash from Beijing and other governments.

That’s the lowdown from Steve Vickers, the former commander of the Royal Hong Kong Police criminal intelligence bureau, and now the head of his own specialist risk mitigation, corporate intelligence, security and consulting company.

Vickers was also the man behind “the Vickers Report,” a confidential document that allegedly contained evidence of connections between Sheldon Adelson’s LVS properties in Macau and the Triads, via the junket industry.

Although the report was used as evidence in the high-profile wrongful dismissal case between LVS and Steve Jacobs, the former CEO of Sands China, turned whistleblower, its contents were never revealed to the public.

Beijing Threatened

Speaking to GGRAsia at a breakfast briefing organised by the British Business Association of Macao, Vickers warned that Beijing’s anti-corruption drive was still in full flow.

“Potentially, from an organised crime point of view, cryptocurrencies… do afford opportunities for the avoidance of government duty,” he said, adding that cryptocurrencies represented a threat to the government’s efforts to prevent capital flight from mainland China.

“…Unfortunately, the side effect of cryptocurrency is the anonymity it provides,” he continued. “A number of extortion cases I have dealt with involving kidnap, ransom and other offences had a ‘crypto’ element, unfortunately. This is something that governments need to get their heads around now, before it becomes more difficult.”

Cryptocurrency transactions are essentially pseudo-anonymous in their nature. While it’s true that all transactions are recorded in an open distributed ledger which makes every single transaction completely transparent and traceable by anyone, it’s still possible to create a new bitcoin address without the need to verify your identity, as you must with a bank account.

Bitcoin Plunges on Asian Clampdown

Meanwhile, the price of bitcoin, so ascendant of late, plunged by 14 percent this week, largely on the news that the People’s Bank of China was moving to clamp down on its bitcoin miners.

The bank is seeking to limit the amount of electricity they can use following concerns about excessive energy consumption and the potential financial risk to Chinese citizens.

Chinese bitcoin miners currently produce about two thirds of the world’s biggest cryptocurrency.

Bitcoin tumbled further on Thursday when South Korean authorities announced they were preparing legislation to ban cryptocurrency trading.

Dragon’s Teething Pains

Last year, Macau-based gaming company Dragon Corp revealed its plan to “integrate blockchain into the world’s biggest gambling hub” through an initial coin offering for its new digital currency.? The company said it hoped to raise $500 million, which would be invested in the under-construction Dragon Pearl floating casino and its future junket operations.

It would for the first time permit the public to own pieces of a Macau casino, the company said. But its plans were thrown into disarray when the South China Morning Post reported the mysterious presence of notorious former Triad boss “Broken Tooth” Wan Kuok-koi turned up to Dragon Corp’s signing ceremony with its technology partner.

“I think it’s true to say that certain very colourful characters previously associated with the negative side of gambling, particularly here in Macau, have shown an interest in cryptocurrencies, and understand the opportunity it presents to avoid borders when seeking to make cross-border transactions,” said Vickers.