Money laundering and cryptocurrencies: challenges and initiatives

Document Type : Research Paper

Authors

1 MA. Student in Private Law in the Law Faculty of Kashan University, Esfehan, Iran

2 Associate Professor in the Law Faculty of Kashan University, Esfehan, Iran

Abstract

One of the legal challenges of cryptocurrencies- called “revolutionary money circle”- is its use in money laundering which in spite of trade prevalence, is a hurdle against cryptocurrencies acceptance by Legislature. In this study, we’ve tried to answer the questions about "cryptocurrency role in money laundering " and "methods of cryptocurrency money laundering " through a comprehensive analysis. They have been included in the money laundering process based on their inherent features such as “facilitation” and “diversification”. In this way, “coin mixers; illegal currency exchange; cryptocurrency ATMs; pre-payment cards; gambling websites” work as tools for cryptocurrency money laundering. Thus, along with criminal codes, governments and different organizations have played active roles and have established rules that require financial service providers to identify customers. Also, FATF has emphasized, in its updated guidelines, that cryptocurrency service providers must be regulated by money laundering and terrorism financing fighting policies. It's obvious that the implementation of such regulations by legal regimes’ support and development of solutions such as “customer identification” can contribute to solve the problem of anonymity of trading parties. Therefore, in money laundering fighting process, the problem is more about tracking technologies rather than legal gaps. In conclusion, the government should be equipped with the required technology.

Keywords

References

  1. ارجمندنژاد، عبدالمهدی (1384). شناسایی کافی مشتری از سوی بانک‌ها، مدیریت کل نظارت بر بانک‌ها و مؤسسات اعتباری (ادارة مطالعات و مقررات بانکی).
  2. سید حسینی، میرمیثم؛ دعایی، میثم (1393). بیت‌کوین نخستین پول مجازی، مدیریت پژوهش، توسعه و مطالعات سازمان بورس اوراق بهادار، گزارش تحقیقاتی 93-6-2014.
  3. عزیزی، فاطمه؛ سلیمانی، هادی (1398). «معرفی بیت‌کوین و چالش‌های امنیتی آن»، پدافند غیرعامل، ش
  4. مددی، مهدی؛ قائمی خرق، محسن؛ شفیعی، قاسم (1400). جستار فقهی حقوقی در مسئلة قانونمندسازی «ارزهای رمزنگاری‌شده»، مجلس و راهبرد، دورة 28، ش 1 (پیاپی 105).
  5. میرزاخانی، رضا (1396)، بیت‌کوین و ماهیت مالی - فقهی پول مجازی، مرکز پژوهش، توسعه و مطالعات اسلامی سازمان بورس و اوراق بهادار، گزارش تحقیقاتی 96-20-2017.
  6. نوری، مهدی؛ نواب‌پور، علیرضا (1397). مقدمه‌ای بر تنظیم‌گری رمزینة ارزها در اقتصاد ایران، شمارة مسلسل 15932، مطالعات اقتصادی مجلس.
  1. Castor, amy (2019). “Spanish authorities: bitcoin ATMs expose hole in AML laws” https://www.atmmarketplace.com/articles/spanish-authorities-bitcoin-atms-expose-loophole-in-aml-laws/
  2. European Central Bank (E.C.B), (2012). “Virtual Currency Schemes.” Technical Report, October. Available at https://www.ecb.europa.eu/pub/pdf/other/ virtualcurrencyschemes201210en.pdf
  3. FATF (2014). “Virtual Currencies Key Definitions and Potential AML/CFT Risks”.
  4. FATF (2015). “GUIDANCE FOR A RISK-BASED APPROACH VIRTUAL CURRENCIES”.
  5. FATF (2020). “INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION The FATF Recommendations”.
  6. Quinlan, Benjamin & Kwan, Yvette (2016). From KYC to KYT, QUINLAN & ASSOCIATES, https://www.quinlanandassociates.com/wp-content/uploads/2018/03/Quinlan-Associates-From-KYC-to-KYT-new.pdf.
  7. Ruffing T., Moreno-Sanchez P., Kate A. (2014). “CoinShuffle: Practical Decentralized Coin Mixing for Bitcoin” In: Kutyłowski M., Vaidya J. (eds) Computer Security - ESORICS 2014. ESORICS 2014. Lecture Notes in Computer Science, Vol 8713. Springer, Cham
  8. Strehle, Elias, & Ante, Lennart (2020). “Exclusive Mining of Blockchain Transactions” BRL Working Paper Series No. 13.

Files

Share

How to cite

Statistics