Auditor KPMG Says Regulators Need 'Up-to-Date' Standards for Money Laundering in Crypto
June 29 2018 - 10:31AM
ADVFN Crypto NewsWire
Major global auditing and consulting firm KPMG has
published a study focused on
financial crime in Switzerland, with a section on cryptocurrency’s role,
Cointelegraph auf Deutsch reported June 28.
KPMG devotes a section of their study to the role of cryptocurrency in money laundering and
financial crime, illustrating methods used to launder money via
digital currency. In the text addressed to financial institutions,
KPMG also lays out tips on how to tackle the phenomenon.
According to KPMG, money laundering can be accomplished by
buying cryptocurrency at an exchange or by cash or debit card at
cryptocurrency ATM using the services of accomplices who have clean
records, corroborated employment and an impeccable online profile.
KPMG’s report states:
“Launderers use mixing (or tumbling) services to swap primary
coin addresses for temporary digital wallet addresses to fool the
blockchain and break audit traceability. Another tactic uses false
receiving addresses to re-route transactions to backup addresses,
also breaking the audit trail. Mixed primary coins are then
transferred to an advance digital exchange to purchase privacy
coins.”
Given the specific nature of money laundering via crypto, KPMG
argues that banks can no longer rely on traditional anti-money
laundering tactics.
KPMG proposes that financial institutions and regulators work
together to more effectively combat money laundering, stating:
“Regulators must develop more up-to-date, focused standards that
deal with the challenges of this rapidly evolving area. And
financial institutions must take responsibility for ensuring their
systems and processes are capable of mitigating the risks insofar
as possible.”
The phenomenon of using crypto to launder money has long been
used to criticize
cryptocurrency. In April, major crypto exchange Bitfinex was accused by Polish
prosecutors of having “ties” to money allegedly laundered and
seized in a Polish bank.
The G20 countries discussed the subject of crypto
used for money laundering at their meeting in March 2018 with the
intent to develop common regulations globally.
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