Encrypted Digital Cash Transfers: Why Traditional Money Laundering Controls May Fail Without Uniform Cryptography Regulations

This Note argues that key escrow represents a solution to the problem of digital money laundering. In addition, this Note argues that the European Commission has wrongly concluded that key escrow should develop as a product of market forces rather than aggressive legislation, and should align its policy with the United States, France, and Great Britain to develop a joint network of key escrow authorities. Part I of this Note explains the operation of digital payment systems, digital money, and cryptography. Part I also sets forth existing legal safeguards against money laundering. Part II outlines the key escrow policies of the European Community, Great Britain, France, and the United States. Part III analyzes the European Commission’s arguments against implementing key escrow and suggests that these arguments have been addressed and effectively rebutted by key escrow proposals in the United States and Great Britain. This Note concludes that a global network of key escrow authorities would provide law enforcement with the means to prevent digital money laundering.