The Financial Action Task Force (FATF) has stated that the country needs to do more with regards to monitoring cryptocurrency. The report released from the task force essentially states that the country isn’t doing enough with regards to ensuring that cryptocurrency is used as conduit for terrorist financing and money laundering. For those who are unaware, the FATF is an organization formed by the G7 in order to address international money laundering.
The report claims specifically that the UK faces severe threats from international terrorism, and that “virtual currency providers are not yet covered by AML/CFT requirements.”
The report elaborates: “The UK acknowledges the inherent vulnerabilities associated with the anonymity of VCs [virtual currencies], and while the risk of ML/TF in this area is assessed as low, the UK acknowledges that there are intelligence gaps and VCs are being used in illicit activity (particularly in online marketplaces for the sale and purchase of illicit goods and services).
It continues: “As a result, the UK intends to regulate virtual currency exchange providers under its implementation of the EU’s fifth Anti-Money Laundering Directive.”
The report actually praises the UK in terms of how it deals with financial crime. It states that the U.K. has a “robust understanding” of monitoring and preventative measures with regards to the issue, and noted the fact that it conducted thousands of investigations last year, which resulted in 1400 convictions.
The report does seem to imply that the cryptocurrency sector could be a weakness for criminals to exploit. However, it recognizes that as of right now, the issue is not a central threat to the country. Specifically, the report states: “This is an emerging risk and there is not yet evidence to suggest that broad scale ML/TF is occurring in the UK through this relatively small sector.
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