Summary

In 2018 the Financial Action Task Force (FATF) has released a report on money laundering and terrorist financing risks associated with virtual assets (VA) and virtual asset service providers (VASPs). VAs and services have the potential to increase financial innovation and efficiency, but also provide opportunities for criminals to launder money and finance illegal activities. This report includes red flag indicators of VAs to help financial institutions, designated non-financial businesses and professions, and VASPs identify and report potential money laundering and terrorist financing activities involving VAs. The report may also be useful for operational agencies, regulators, and prosecutors in detecting, investigating, and confiscating VAs involved in illigal activity.

Key Points

  • This report is a practical tool for identifying, detecting, and preventing criminal, money laundering (ML), and terrorist financing (TF) activities involving virtual assets (VAs).
  • The indicators included in this report are specific to the vulnerabilities associated with VAs and should not be viewed in isolation but contextualized with information from relevant authorities.
  • The report recommends a risk-based approach with regular dialogue between the public and private sectors.
  • The indicators are best used when combined with contextual information from domestic law enforcement and public sources.
  • This report is not intended as a regulatory tool for compliance and examination purposes or as a checklist when supervising private sector institutions.

Published by …

Financial Action Task Force (FATF)

Recommended citation

FATF (2020), Money Laundering and Terrorist Financing Red Flag Indicators Associated with Virtual Assets, FATF, Paris, France, www.fatf-gafi.org/publications/fatfrecommendations/documents/Virtual-Assets-Red-Flag-Indicators.html