The risks of cryptoassets from a financial crime, money laundering and terrorist financing perspective
The risks of cryptoassets from a financial crime, money laundering and terrorist financing perspective

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • The risks of cryptoassets from a financial crime, money laundering and terrorist financing perspective
  • What are cryptoassets?
  • Criminal exploitation of cryptoassets
  • Nature of cryptoassets
  • Cybercrime
  • Money laundering and terrorist financing
  • Is the threat real?
  • Criminal cases involving cryptoassets
  • Regulators, financial crime and cryptoassets
  • FATF reports and recommendations on cryptoassets
  • More...

What are cryptoassets?

One of the hurdles in relation to understanding non-traditional currencies and assets lies in the inconsistent use of language. Regulators and tax authorities, as well as commentators, refer variously to digital currencies, virtual currencies, cryptocurrencies, cryptoassets and crypto tokens, and it is not always clear whether they are using the terms interchangeably or with the specific meaning of each in mind. For more information about how these terms are defined, see Practice Note cryptoassets—essentials.

This Practice Note examines the risks of cryptoassets from a financial crime, money laundering and terrorist financing perspective. It considers why cryptoassets are susceptible to, and can facilitate, crime and how regulators have responded to these perceived threats. It also discusses recent criminal cases involving cryptoassets, in particular Bitcoin.

Criminal exploitation of cryptoassets

Criminal usage of Bitcoin and other cryptoassets has attracted the attention of financial regulators, legislators, the media and the public. The focus has been on how pseudonymous and decentralised virtual currencies—and the consequent difficulty of tracing payments—may contribute to criminal activity such as cybercrime, money laundering and terrorist financing.

Nature of cryptoassets

Cryptoassets are digital assets in which encryption techniques are used to regulate the generation of units of the assets in question and verify the transfer of assets. Cryptoassets are often (but not always) decentralised, meaning that they are not issued by a central authority who controls access. In

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