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  • 1 0000000404811396https://isni.org/isni/0000000404811396International Monetary Fund

Title Page

FINTECH NOTE

Virtual Assets and Anti-Money Laundering and Combating the Financing of Terrorism (1) Some Legal and Practical Considerations

Prepared by Nadine Schwarz, Ke Chen, Kristel Poh, Grace Jackson, Kathleen Kao, Francisca Fernando, and Maksym Markevych

October 2021

INTERNATIONAL MONETARY FUND

Copyright Page

©2021 International Monetary Fund

Cover Design: IMF Creative Services

Composition: The Grauel Group

Names: Schwarz, Nadine. | Chen, Ke (Financial Sector Expert). | Poh, Kristel. | Jackson, Grace. | Kao, Kathleen. | Fernando, Francisca. | Markevych, Maksym. | International Monetary Fund, publisher.

Title: Virtual assets and anti-money laundering and combating the financing of terrorism (1) : some legal and practical considerations / prepared by Nadine Schwarz, Ke Chen, Kristel Poh, Grace Jackson, Kathleen Kao, Francisca Fernando, and Maksym Markevych. Other titles: FinTech notes (International Monetary Fund).

Description: Washington, DC : International Monetary Fund, 2021. | October 2021. | Fin-tech notes | Includes bibliographical references.

Identifiers: ISBN 9781513593760 (paper)

Subjects: LCSH: Money laundering—Prevention—Law and legislation. | Terrorism—Prevention—Law and legislation. | Digital currency—Law and legislation.

Classification: LCC HV6768.S39 2021

DISCLAIMER: Fintech Notes offer practical advice from IMF staff members to policymakers on important issues. The views expressed in Fintech Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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Contents

  • Abbreviations

  • Introduction

  • The Financial Integrity Risks Related to VAs

  • Key Concepts

  • Operational Aspects of an Effective AML/CFT System—Legal and Practical Considerations

  • Conclusion

  • Annex 1. FATF Standards Related to VAs and VASPs

  • Annex 2. Initiatives to Build LEA Capacity

Abbreviations

AI

Artificial Intelligence

AML/CFT

Anti-Money Laundering/Combating the Financing of Terrorism

CBDC

Central Bank Digital Currency

CDD

Customer Due Diligence

DLT

Distributed Ledger Technology

DNFBPs

Designated Non-Financial Businesses and Professions

FATF

Financial Action Task Force

FIU

Financial Intelligence Unit

GSC

Global Stablecoin

ICO

Initial Coin Offering

IPO

Initial Public Offering

LEA

Law Enforcement Agency

ML

Money Laundering

MLA

Mutual Legal Assistance

MVTS

Money or Value Transfer Service(s)

PF

Financing of Proliferation of Weapons of Mass Destruction

TF

Terrorist Financing

VA

Virtual Asset

VASP

Virtual Asset Service Provider

Virtual Assets and Anti-Money Laundering and Combating the Financing of Terrorism (1): Some Legal and Practical Considerations
Author: Nadine Schwarz, Ms. Ke Chen, Ms. Kristel Poh, Ms. Grace Jackson, Kathleen Kao, and Maksym Markevych