BLOCKCHAIN-BASED FINANCIAL CRIMES: LEGAL CHALLENGES AND EVOLVING PROSECUTORIAL STRATEGIES IN CRYPTOCURRENCY-RELATED OFFENCES

The rapid proliferation of blockchain technology and cryptocurrency has engendered a
paradigm shift in the architecture of financial crime. From money laundering orchestrated
through decentralised exchanges to large-scale investment fraud enabled by smart contracts,
blockchain-based financial crimes present unprecedented challenges for legal systems across
jurisdictions. This paper examines the intersection of distributed ledger technology and
criminal law, critically analysing the legal lacunae that facilitate illicit activity and the
evolving prosecutorial strategies deployed to counter them. Drawing upon international case
law, legislative frameworks, and interdisciplinary scholarship, the paper argues that effective
prosecution of cryptocurrency-related offences demands a coordinated response integrating
advanced forensic analytics, harmonised international legal standards, and adaptive domestic
legislation. The paper further evaluates the Indian regulatory landscape, tracing its
development from judicial interventions to the Virtual Digital Assets framework, situating it
within the global anti-money laundering matrix. Ultimately, the paper contends that while
technological innovation has outpaced legal architecture, emerging prosecutorial tools and
international cooperation mechanisms are progressively closing the enforcement gap.
Keywords: Blockchain, Cryptocurrency, Financial Crimes, Money Laundering, Prosecutorial
Strategy, FATF, Virtual Digital Assets, AML, Decentralised Finance.