Cryptocurrencies (CCs), crypto-assets, virtual currencies, virtual assets, digital currencies: the steep rise in the employment of these assets over the course of the 2010s has given rise to growing global interest in them. Commonly associated with the anonymous and decentralized features of their best-known representative, Bitcoin, these assets have raised mixed dispositions on the part of the stakeholders: on the one hand, curiosity and enthusiasm regarding their potential for innovation; on the other, concern and distrust regarding the risks and implications associated with their use.
While it is admitted that CCs do not currently pose a threat to international financial stability1, especially as their combined global market value is still relatively low2, this does not nullify the dilemmas faced by regulators. Some of the topics that national and international stakeholders have been addressing include the use of these assets for illicit purposes, taxation of gains from transactions involving them, protection of investors and consumers who use them, and even the environmental impacts of the industry. Therefore, while the debate over whether cryptographic assets should be regulated is not over3, it is being gradually replaced in several countries by discussions over how and when regulations should take place.
This publication is the result of research into G20 members’ regulatory systems, listing existing provisions and regulatory gaps in reference to international harmonization recommendations on money laundering and crypto-related issues.
Author(s): Gustavo Rodrigues; Lahis Kurtz
Publisher: Institute for Research on Internet and Society - IRIS
Year: 2019
Language: English
Pages: 61
City: Belo Horizonte
Tags: internet; bitcoin; cryptocurrency; regulation; financial regulation;
1. INTRODUCTION
2. THE GLOBAL ANTI-MONEY LAUNDERING REGIME
2.1. The emergence of the international legal framework to
c
ombat money laundering
2.2. The International Financial Action Task Force (FATF) and the Risk-Based Approach
3. CRYPTOCURRENCIES AND MONEY LAUNDERING:
REGULATORY RISKS AND TRENDS
3.1. Risks associated with using cryptocurrencies for money laundering
3.2. Regulatory trends in the 2010s
3.
2.1. Industry self-regulation
3.
2.2. External regulation at national level
4. INTERNATIONAL AML REGULATION OF CRYPTOCURRENCIES
4.1. Directed international efforts
4.2. FATF’s strategy: regulating service providers
5. METHODOLOGY FOR INFORMATION GATHERING
5.1. Definition of a study subject: exchanges
5.2. Creation of the observation instrument
5.3. Sample definition - G20 members
5.4. Time scope
5.5. Sources
5.6. Summary table of regulations and sources used
6. RESULTS AND DISCUSSIONS
6.1. Concepts adopted in the regulation
6.1.1. Cryptocurrency
6.1.2. Exchange
SUMMARY
6.2. Regulation about exchanges
6
.2.1. Nature of the regulatory instrument
6
.2.1.1. Legislative
6
.2.1.2. Binding non-legislative
6
.2.1.3. Recommendation
6
.2.2. Rules and obligations
6
.2.2.1. Overview of rules and obligations
6.2.2.2. User identification and cooperation
with authorities
6
.2.2.3. Record keeping obligation and
minimum storage time
6
.2.2.4. Obligation to notify suspicious transactions
and the threshold for suspicious transactions
6
.2.2.5. Provision of external supervisory authority
and registration
6.3. Regulatory compliance oversight
6.3.1. Sanctions
6.3.1.1. Sanctions of standardized enforcement
6.3.1.2. Sanctions of specific supervision
6.4. Discussion of results
6
.4.1. On the conceptual approach of the regulated theme
6
.4.2. On the character of regulation
6
.4.3. On rules and obligations
6
.4.4. On sanctions
7. CONCLUDING REMARKS
APPENDIX A
APPENDIX B
8. REFERENCE LIST AND BIBLIOGRAPHY
