The Financial Stability Institute issued its insights on supervising cryptoassets for anti-money laundering. The paper noted that 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 paper discusses emerging regulatory approaches and supervisory practices and identifies policy priorities to address common challenges faced by regulatory authorities. It also notes the efforts of hte Financial Action Task Force in this area to prevent the misuse of cryptoassts for ML/TF.
A copy of the paper can be viewed here.