Cryptocurrencies are one of the most innovative and fast-growing financial services sectors. However, all innovations come with risks, and many policymakers have identified regulatory compliance and AML as some of the biggest vulnerabilities of cryptocurrencies. This is something that affects anyone, if you as an online casino player want to know more, just stay with us and discover ways to earn free crypto

What does AML really mean for cryptocurrencies?


AML best practices in the cryptocurrency industry are mostly similar to those of other financial services companies. A risk-based approach remains essential, and a comprehensive risk assessment is an important step in this process. It is also important to review risk assessments regularly, especially given the current pace of regulatory changes.

Human resource management is one area where compliance is probably the biggest challenge for cryptocurrency companies. Many experienced compliance professionals have higher salary expectations than small, fast-growing cryptocurrency companies that lack the structures and processes of larger organizations.

Regardless of the role of the AML team, it is important for compliance officers dealing with cryptocurrency to build relationships. This is especially important for those in contact with regulators, but also within the company.

Do companies develop the technology themselves or do they use specialized service providers? Many cryptocurrency companies recognize the importance of automation for rapid growth and choose to outsource.

Crypto-currency compliance teams also need to understand companies’ expansion plans to assess their regulatory impact. When launching a new currency or product, have the compliance implications been fully assessed at the planning stage? Does the company entering the new market have a local presence that can help build relationships?

An overview of global anti-money laundering regulations for cryptocurrencies.

Anti-money laundering regulations for cryptocurrencies differ in many ways around the world, and businesses operating in multiple jurisdictions need to understand the specifics of each market in which they operate. Indeed, one of the biggest challenges for crypto-currency compliance teams is navigating the regulatory gray areas.

Anti-money laundering regulations for crypto-currencies: the Americas


In the United States, the Anti-Money Laundering Act of 2020 (AMLA) placed all service providers selling virtual and digital assets under the Bank Secrecy Act. Since then, however, the regulation of crypto-currencies in the United States has evolved rapidly.

In Canada, crypto-currency providers are treated as issuers of securities and virtual currency traders must register as money services businesses.

Anti-money laundering provisions for crypto-currencies: Europe

In the European Union, the regulation of crypto-currencies is currently covered by the Fifth Anti-Money Laundering Directive, which also applies to crypto-currency exchanges and depositories.

The UK government has announced plans to make the country a global center for crypto technology, including recognizing stablecoins as a means of payment. The government is also reviewing crypto-currency assets as part of a broader review of the nation’s financial crime legislation.

Regulating crypto-currencies: the Asia-Pacific region


In Australia, crypto-currencies are treated as either financial products regulated by the Australian Securities and Investments Commission (ASIC) or as consumer products regulated by the Australian Competition and Consumer Commission (ACCC). Crypto-currencies or CASSPrs are registered with AUSTRAC to prevent money laundering and terrorist financing.

In Singapore, crypto assets are regulated under the Payment Services Act (PSA) as “digital payment tokens” (DPT) and crypto asset providers are regulated as “digital payment currency services.” “They must be licensed by the Monetary Authority of Singapore (MAS). The recently passed Financial Services and Markets Act 2024 also applies to crypto-currency companies based in Singapore but offering their services overseas, which are subject to local regulation. The bill also introduces significant new licensing requirements and powers for MAS.

Japan was one of the first countries to introduce specific regulation for crypto-currencies, and different types of tokens are subject to different types of regulation. In China, on the other hand, only the local digital yuan will be accepted as legal tender, while all other crypto-currency transactions will be banned from September 2024. Individuals will still not be allowed to own crypto-currencies.

Why is anti-money laundering compliance important for crypto-currency companies?

As governments around the world continue to create a regulatory framework for crypto-currencies, businesses will soon face a tipping point. It will be easier for businesses to prepare by understanding the current state of anti-money laundering compliance – and where it is likely to go in the coming months. This will help them build valuable trust with potential customers and regulators.

To stay ahead of the latest regulations, companies must use predictive analytics to anticipate future regulatory changes and adjust compliance budgets. This allows them to have the right staff to meet many of the new requirements.

Companies also need to understand the new requirements and their implications. This may mean making incremental changes to existing regulations and controls or implementing a new program in a new jurisdiction. Many regulatory risks – such as those related to penalties – generally do not apply to crypto-currencies.

The importance of proactive regulation.


Non-compliance with anti-money laundering regulations presents a number of significant risks for crypto-currency businesses. While the exact nature of the risks depends on the specific violation and the company’s business model, some of these risks include:

Enabling terrorist financing: governments of geopolitically sensitive countries, including India, have argued that this is the biggest risk associated with crypto-currency-related crimes. As a result, businesses can expect new, stricter measures on terrorist financing. For example, the Indian government recently investigated the use of crypto-currencies by the al-Qassam Brigade, the militant wing of Hamas.

Overlap: Criminals may try to convert illegal fiat currency into crypto-currency to hide its origin. According to the Financial Action Task Force on Money Laundering (FATF), criminals used phishing to steal 400 million South Korean kroner from victims before conducting a series of high-value transactions to transfer the money to a foreign crypto-currency wallet. The funds passed through 48 accounts to disguise their origin.

Regulators regularly publish guidance on money laundering risks in their jurisdictions to give businesses insight into potential areas of non-compliance. Our guide to money laundering in the crypto-currency sector outlines the key regulatory risks that businesses in the sector should be aware of.