Karsten Treiber/ December 4, 2018/ Uncategorized

Cryptocurrencies are developed, motivated by the financial crisis in 2008, to be independent of financial institutions or nations and are traded directly between users by peer-to-peer transaction authentication. In recent years the popularity and the use of cryptocurrencies is steadily increasing and so is the pressure for regulations. This challenges traditional methods of banking compliance.

The anonymity, liquidity, and borderless nature of cryptocurrencies make them susceptible to financial crimes especially to all three stages of money laundering and terrorist financing.

  • Placement: Accounts are anonymous and can be opened quickly and easily, which provides good conditions for placing illicit cash into circulation.
  • Layering: The borderless nature is ideal to transit illicit proceeds across borders.
  • Integration: The growing list of goods accepted for purchase with cryptocurrencies expands integration opportunities.
  • Terrorist financing: Anonymity and lack of global regulation makes it easy to avoid triggering red flags indicating terrorist financing.

The diverse array of policy proposals by national governments reflects the great difficulty in regulating the fast evolving cryptocurrency market creating a patchwork of differing approaches and uncertainty across the market.

But global coordination is near. Last month the Financial Action Task Force (FATF), the global money laundering watchdog, announced the preparation of the first set of global guiding principles to unify regulations of cryptocurrencies.“By June, we will issue additional instructions on the standards and how we expect them to be enforced,” explained Marshall Billingslea, FATF president.

According to Dr. Paulina Pesch, the coordinator of the German subproject of Bitcrime, it is not adequate to blindly adopt the conventional indications on money laundering to Bitcoin.

Whether the new FATF regulations are effectively innovative will become apparent, but it is certainly a welcomed step in the right direction.


  1. Allen and Ovary: Cryptocurrency AML risk considerations
  2. Interview with Dr. Paulina Pesch, coordinator of Bitcrime
  3. Reuters: money laundering watchdog to set first cryptocurrency rules by June
Karsten Treiber

About Karsten Treiber

Karsten Treiber is Director Digital Finance of targens GmbH. His tasks include the assessment of innovative, reliable and investment - secure IT architectures and their productive applications. His focus area is Blockchain and Distributed Ledger Technology including their professional use, assessment and determination of effects on business models. He is a member of the Special Interest Group Blockchain of bwcon, the blockchain expert network blockLAB, the Blockchain Bundesverband and the publisher of the podcast blockFUNK.