{"id":11505,"date":"2026-07-14T09:52:15","date_gmt":"2026-07-14T09:52:15","guid":{"rendered":"https:\/\/www.amlcc.com\/?p=11505"},"modified":"2026-07-14T09:52:21","modified_gmt":"2026-07-14T09:52:21","slug":"what-are-the-risks-of-crypto-assets","status":"publish","type":"post","link":"https:\/\/www.amlcc.com\/ai\/what-are-the-risks-of-crypto-assets\/","title":{"rendered":"What are the risks of crypto-assets?"},"content":{"rendered":"\n

What are the risks of crypto-assets?<\/h1>\n\n\n
\"Richard<\/div>
Richard Simms<\/span>

Director and Founder of AMLCC and AMLCC Consult<\/h3><\/div><\/div><\/div><\/div>\n\n\n
\"What<\/figure><\/div><\/div>\n\n\n\n
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Crypto-assets, also known as virtual assets, carry an elevated money laundering, terrorist financing and proliferation financing risk because they can move value across borders in minutes. They do this outside of the traditional banking system. And they do it with at least a degree of anonymity. In many cases, crypto-assets can be used to obscure the involved parties completely. <\/p>\n\n\n\n

FATF<\/a> (the Financial Action Task Force) brought crypto-assets into the global AML framework in 2019 and continues to identify them as a growing route for criminal funds.<\/p>\n\n\n\n

You don’t need to work in the crypto sector for this to affect you. If your clients hold, trade or accept crypto-assets, the risk reaches your firm through source of funds, source of wealth and the transactions you facilitate.<\/p>\n\n\n\n

Why do criminals use crypto-assets?<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h2>\n\n\n\n

There are three features of crypto-assets that make them ideal for money laundering<\/a>, terrorist financing<\/a> and proliferation financing<\/a>:<\/p>\n\n\n\n

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  1. Speed<\/strong>.\u00a0A crypto transaction can be completed in minutes, sometimes seconds. In many cases, there\u2019s simply not enough time for a suspicious international transfer to be delayed, questioned or frozen. By the time anyone raises a concern, the funds could have moved on several times.<\/li>\n\n\n\n
  2. Reach.<\/strong>\u00a0Crypto-assets move directly from wallet to wallet, often between jurisdictions, with no traditional banking system in the middle asking pertinent questions. FATF has been clear that, because virtual assets are borderless, weak regulation in one jurisdiction creates risk for everyone else.<\/li>\n\n\n\n
  3. Anonymity.<\/strong>\u00a0Some exchange platforms let users trade without any identity checks at all. Mixing and tumbling services pool funds from many users and redistribute them, deliberately breaking the trail between sender and recipient. In fact, some cryptocurrencies are designed specifically to hide transaction details.<\/li>\n<\/ol>\n\n\n\n

    Where does the money come from?<\/strong><\/strong><\/strong><\/h2>\n\n\n\n

    FATF’s red flag indicators report<\/a>, built on more than 100 case studies from across its global network, shows that criminals have used virtual assets to launder proceeds from:<\/p>\n\n\n\n