Aspects of the products and services offered by  digital currency exchanges have been identified as being attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

WHY DO DIGITAL CURRENCY EXCHANGES HAVE AML/CTF OBLIGATIONS?

Digital currency can mean a digital representation of either virtual currency or e-money and thus is often used interchangeably with the term “virtual currency”.
Decentralised, math-based virtual currencies have attracted increasing attention from an AML/CTF perspective because digital currencies are considered by some to be the future for payment systems.
Digital currencies may also provide a powerful tool for criminals, terrorist financiers and other sanctions evaders to move and store illicit funds, out of the reach of law enforcement and other authorities.

WHAT ARE THE ML/TF RISKS FACED BY DIGITAL CURRENCY EXCHANGES?

The Money Laundering and Terrorist Financing (ML/TF) risks associated with the digital currency sector include:

  • Convertible virtual currencies that can be exchanged for real money or other virtual currencies
  • Greater possible anonymity than traditional non-cash payment methods
  • Virtual currency systems can be traded on the Internet, and are generally characterised by non-face-to-face customer relationships
  • Permit anonymous funding (cash funding or third-party funding through virtual exchangers that do not properly identify the funding source)
  • Permit anonymous transfers, if sender and recipient are not adequately identified

Digital currencies businesses captured by the AML/CTF obligations must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures. This is a critical first step in complying with the AML/CTF Act ands Rules.

WHAT SERVICES ARE COVERED BY AML/CTF OBLIGATIONS?

Digital currencies businesses captured by the AML/CTF obligations are those providing services to exchange (buy and sell) digital currencies for FIAT currencies.

Fiat currency is legal tender whose value is backed by the government that issued it. The Austrian dollar is a fiat currency.

The provision of ‘wallet’ services that hold digital currencies for customers are also captured by the AML/CTF Act.  However, digital currency to digital currency exchange is currently excluded. 

WHAT IS A RISK BASED AML/CTF REGIME?

The AML/CTF regime is risk based, which means that your responses to the AML/CTF obligations placed upon you should be risk-based. 

A risk-based AML/CTF regime requires that you understand and address the Money Laundering and Terrorism Financing (ML/TF) risks associated with the digital currency services you offer.

You must then design, implement and maintain systems, procedures and controls that are proportionate to your ML/TF risks.

How can Initialism help?

Initialism are the AML/CTF experts, so you don’t have to be.

With over 30 years of expert knowledge and real world experience our AML/CTF compliance services solutions will to help you navigate your legal and regulatory requirements so that your business complies with its AML/CTF obligations in the fastest and most cost-effective way.

Initialism provide a range of AML/CFT services and solutions to support your business in becoming AML/CFT compliant and maintaining compliance.

Our services and solutions allow you to tailor support based on your capacity, experience and budget.

AML/CTF compliance solutions for digital currency exchanges

Our AML/CTF compliance solutions for the digital currency sector draw on unparalleled expertise, knowledge and real-world experience.

Why chose Initialism?

UNPARALELLED EXPERTISE

Our expertise covers all AML/CTF disciplines and brings unique perspectives, approaches and solutions to the AML/CTF challenges faced by the accountancy profession

IN-DEPTH INDUSTRY KNOWLEDGE

Our AML/CTF compliance knowledge includes working with accountancy firms and we understand what compliance means for your business

REAL WORLD PERSPECTIVES

We have experience in delivering workable AML/CTF compliance to the accountancy profession

OVER 30 YEARS EXPERIENCE

Our knowledge and expertise has been hard earned and comes from working in the area of AML/CTF for many decades

SOLUTIONS THAT WORK

We have experience providing tried and tested AML/CTF solutions, regardless of the size and complexity of your accountancy practice

TAILORED FOR YOUR BUSINESS

Our AML/CTF compliance solutions are flexible and can be tailored to your capacity, experience and budget

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