Cryptocurrencies and fraud: Audit trail and regulatory slack domains

From a discriminated approach, this study examined cryptocurrencies and fraud with a focus on audit trail and regulatory slack. The is anchored on the rapid growth of cryptocurrencies in the global financial systems with their unique attributes of being decentralized, fast, and borderless transaction platforms. While these innovations have improved financial inclusion and efficiency, they have concomitantly enacted new opportunities for fraud and regulatory challenges. Thus, from a qualitative approach, a content analysis of the open-source current literature was deployed to glean evidence-driven insight. It was observed that while cryptocurrencies serve as alternative investment growth and wealth storage means, they are highly vulnerable to fraud, due to anonymity, lack of centralized control, and rapid technological growth. Therefore, the structural characteristics of cryptocurrencies precinct, significantly weakening traditional control mechanisms and creating opportunities for fraudulent exploitation. Also, blockchain technology which anchors the crypto world creates digital bread crumbs that often fissile out depending on the technological prowess of the perpetrator, enacting difficulties in the audit trail. These have serious implications along theoretical, policy and practical lines. Therefore, the study recommends achieving an optimal effective mitigation of cryptocurrencies downsides within the espoused thematic focus of the study requires a holistic and integrated approach that combines strong regulatory frameworks, advanced technological tools, institutional capacity building, and increased public awareness, as no single mechanism is sufficient to address the complexity and dynamic nature of fraud in digital financial systems.