As cryptocurrencies were introduced to the world, authorities were immediately on red alert about what measures would be needed to make sure they were used for good and not for criminal purposes. As we now know they had good reason to be. If you work in the world of AML/CFT you will know the top risk with crypto is that its technology promotes anonymity and with anonymity usually comes opportunity for criminal activity.

However, according to David Lewis this is no longer the major risk factor. Investigations from around the world are continually reporting that authorities have been successful in to seizing virtual currencies, wallets, and coins from many criminals and their organisations. Due to this the FATF have recently released information that shows that they are now less focused on the technology and more so on the cryptocurrency itself.

He also stressed that it is of the highest priority for any entity working within this sector to review and adopt technology that will assist it in monitoring the increasing volume of transactions and customers when it comes to fulfilling its responsibilities. “At the end of the day it’s all about having an effective AML system, that will identify any suspicious activity in real time” he said.

For those dealing or trading in Crypto your reporting entity responsibilities remain unchanged. You will still need to develop your AML programme according to your profiled risks, which includes conducting enhanced due diligence, monitoring transactions and reporting suspicious activity and/or income that cannot be verified.

Key tips:

• While Crypto remains high risk, the anonymity it once provided to criminals is no longer applicable, as law enforcement have new techniques to trace the currency and the owners.
• It’s important to note that as investigators and their investigation techniques evolve so do criminals – sometimes at a more rapid rate. So, while the risk factors have changed, now is not a time to rest on your laurels. A solid customer due diligence and on-boarding system must be the cornerstone of your AML/CFT programme.
• Training, training and more training! Keep yourself abreast with all the current information available. The Financial Action Task Force has recently released up to date guidance that will assist you in keeping your crypto business ahead of the game. See: https://www.fatf-gafi.org/publications/fatfrecommendations/documents/guidance-rba-virtual-assets-2021.html