On the September 14th, 2020, the Financial Action Task Force published a report entitled ‘Virtual Assets – Red Flag Indicators of Money Laundering (ML) and Terrorist Financing (TF)’ to help national authorities detect whether virtual assets are being used for criminal activity.
Key indicators of ML and TF include:
- Technological features that privileges anonymity;
- Geographical risks;
- Transactions patterns and size;
- Sender or recipient profiles; and
- Source of funds and wealth.
This report will help virtual asset service providers, financial institutions, designated non-financial businesses and professions, and other reporting entities detect and report suspicious transactions. It will also provide useful information for financial intelligence units, law enforcement agencies, prosecutors and regulators to analyze suspicious transaction reports or monitor compliance with anti-money laundering and counter-terrorist financing controls.
The report contains numerous case studies collected by the FATF Global Network to elaborate on instances of red flags. However, it is to be noted that the list of red flags provided are for guidance purposes and are non-exhaustive. The red flags may also result in specific contexts.
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