Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing

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Virtual Assets - Red Flag Indicators

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Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing

Paris, 14 September 2020 - Virtual assets use innovative technology to swiftly transfer value around the world and have many potential benefits, including making payments faster and cheaper. But the anonymity associated with them also attracts criminals, who have used virtual assets to launder proceeds from a range of offences such as the drugs trade, illegal arms smuggling, fraud, tax evasion, cyber attacks, sanctions evasion, child exploitation and human trafficking.

In response, the FATF Report Virtual Assets - Red Flag Indicators

  • Technological features that increase anonymity - such as the use of peer-to-peer exchanges websites, mixing or tumbling services or anonymity-enhanced cryptocurrencies
  • Geographical risks - criminals can exploit countries with weak, or absent, national measures for virtual assets
  • Transaction patterns - that are irregular, unusual or uncommon which can suggest criminal activity
  • Transaction size – if the amount and frequency has no logical business explanation
  • Sender or recipient profiles - unusual behaviour can suggest criminal activity
  • Source of funds or wealth - which can relate to criminal activity

This Virtual Assets - Red Flag Indicators

This report complements the RBA for Virtual Assets & Virtual Asset Service Providers

In brief 

Virtual Assets Red Flag - Financial & Non-Financial Sectors

Virtual Assets Red Flag - Virtual Asset Service Providers

Virtual Assets Red Flag - Public Sector