Applying money laundering reporting requirements to virtual currencies: Syntax error

Hillman, Henry

Abstract

The development of virtual currencies in the past decade, and particularly the popularity of Bitcoin, has raised concerns that such technologies may be utilised by criminals for the purposes of money laundering. Recent guidance from the Financial Action Task Force (FATF) has suggested applying anti-money laundering legislation (AML) to virtual currencies, specifically suspicious activity reporting requirements. This paper seeks to explain what virtual currencies are, and demonstrate the difficulties in applying AML, and specifically suspicious activity reporting requirements, to virtual currency transactions. The argument proposed is that suspicious activity reporting is not compatible with virtual currencies, specifically due to the absence of human interaction with virtual currency transactions.

In achieving this aim the stages of money laundering will be outlined, and a hypothetical example of money laundering through ‘traditional’ methods will be compared money laundering through virtual currencies. The guidance of the FATF will be considered, alongside the responses of the United States, the EU and the UK. The suspicious activity reporting regime of the UK will be applied to virtual currencies and as such the pitfalls will be identified and potential solutions will be considered.

• Presentation Conference Type: Presentation / Talk
• Conference Name: Sussex CRC Annual Graduate Conference
• Start Date: May 12, 2017
• End Date: May 12, 2017
• Acceptance Date: Apr 10, 2017
• Publication Date: May 12, 2017
• Peer Reviewed: Not Peer Reviewed
• Public URL: https://uwe-repository.worktribe.com/output/887824
• Additional Information: Title of Conference or Conference Proceedings : Sussex CRC Annual Graduate Conference 2017