Your Legal & Financial Guide
MONEY LAUNDERING
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CRYPTOASSETS EXCHANGES
02 Your Legal & Financial Guide
Cryptoasset exchanges provide essential liquidity to crypto markets – acting as vital gateways between the fiat and cryptoasset ecosystems. Thus, exchanges inevitably feature heavily in cryptoasset-related money laundering activity.
03 Your Legal & Financial Guide
01
USE OF NON-COMPLIANT OR UNLICENSED EXCHANGES
Criminals deliberately seek out exchanges they know they can exploit with little or no obstruction when moving between fiat and cryptoasset, or from cryptoasset to cryptoasset.
04 Your Legal & Financial Guide
RED FLAGS Exchanges that deliberately flaunt regulation and registration requirements. Exchanges that allow customers to set up accounts with little or no identifying information. Exchange services that do not require customers who open accounts to comply with regulations in any jurisdiction.
05 Your Legal & Financial Guide
02
USE OF EXCHANGES IN HIGH-RISK JURISDICTIONS
Criminals will often look to exchanges that are in high-risk jurisdictions when seeking to exploit. It can include countries and regions that has higher risk for cryptoassetlaundering purposes.
06 Your Legal & Financial Guide
RED FLAGS Countries and regions that are generally high risk for money laundering and terrorist financing purposes Countries subject to international financial sanctions, embargoes and other restrictions Countries on the FATF’s list of High Risk and Non-Cooperative Jurisdictions Countries with no AML/CTF regulation around cryptoassets, or with ineffective regulatory frameworks.
07 Your Legal & Financial Guide
03
USE OF MONEY MULES OR FRAUDULENT DOCUMENTS ON LEGITIMATE EXCHANGES
Criminals often rely on fraudulent documents to open accounts in their own names, or in the names of other individuals. One method involves employing money mules – individuals who are used to open accounts and move funds on behalf of the criminal network.
08 Your Legal & Financial Guide
RED FLAGS
A group of individuals – often of common nationality and similar residential addresses – establish accounts at a cryptoasset exchange, generally within a short time period of one another.
Your Legal & Financial Guide
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Adv. P. M. Mishra Lawyer & International Regulatory Expert