Financial Action Task Force Releases Report on Virtual Currencies

The Financial Action Task Force [on Money Laundering], also known as FATF, has released a new report focusing on virtual currencies. Specifically, the report covers “key definitions” and “potential AML/CFT risks” of these emerging payment methods.

The FATF conducted research into the characteristics of virtual currencies to make a preliminary assessment of the ML/TF risk associated with this payment method. An important step in assessing the risks and developing an appropriate response, is to have a clear understanding of the various types of virtual currencies and how they are controlled and used. This report establishes a conceptual framework of key definitions, which could form the basis for further policy development.

The 15-page document serves as an outline of the inherent risks involved with digital currencies. Really though, things we’ve heard time and time again. We’re talking anonymity issues, limited identification of participants, and the lack of a central governing authority.

It is, in all actuality, aimed at law enforcement officials with the goal to educate them on these very risks using examples of what has already happened in recent history.

Virtual Currency Key Definitions and Potential Aml Cft Risks

The FATF included the following in their statement:

The FATF conducted research into the characteristics of virtual currencies to make a preliminary assessment of the ML/TF risk associated with this payment method. An important step in assessing the risks and developing an appropriate response, is to have a clear understanding of the various types of virtual currencies and how they are controlled and used. This report establishes a conceptual framework of key definitions, which could form the basis for further policy development.

The Financial Action Task Force is an intergovernmental organization founded in 1989 on a G7 initiative. The Paris-headquartered organization is tasked with the responsibility of developing policies that prevent both money laundering and criminal financing.

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