Supervising cryptoassets for anti-money laundering

Although certain cryptoassets have the potential to make payments and transfers more efficient, some of their features may heighten money laundering/terrorist financing (ML/TF) risks. In particular, the speed of transactions, global reach, potential for anonymous activity and the potential for transactions to take place without financial intermediaries make cryptoassets vulnerable to misuse. In fact, the scale of illicit use of cryptoassets is already significant, highlighting the importance of AML/CFT regulation and supervision, as well as law enforcement, in this area.

The Financial Action Task Force has acted swiftly with a view to preventing the misuse of cryptoassets for ML/TF. However, the effectiveness of international standards depends on effective implementation by national authorities, and the supervision of cryptoasset service providers remains nascent globally. This paper aims to contribute to the international debate by assessing emerging regulatory approaches and supervisory practices and identifying policy priorities to address common challenges faced by financial authorities.

JEL classification: F30, F31, G18, G23, G28, O32, O38. 

Keywords: anti-money laundering, supervision, cryptoassets, cryptoasset service provider, virtual asset service provider, travel rule, peer-to-peer