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The concept of virtual assets is becoming increasingly broad, but the risks they pose cannot be ignored.
On November 26, Gou Wenjun, director of the Anti-Money Laundering Monitoring and Analysis Center of the People's Bank of China, stated at the 2021 First Lujiazui National Financial Security Summit and the 11th China Anti-Money Laundering Summit that while virtual assets meet the privacy, currency trust and wealth appreciation needs of some people, their decentralized, anonymous and borderless characteristics, coupled with the capital controls and anti-money laundering compliance requirements faced by cross-border payments, are widely used in illegal transactions such as extortion, drug trafficking, gambling, money laundering, terrorist financing, tax evasion, and cross-border transfer of funds.
Gou Wenjun pointed out that since virtual assets have no physical basis for issuance, they have become a convenient tool for illegal financial activities such as illegal fundraising, pyramid schemes, and fraud. As the scale of virtual assets expands and the number of participants increases, their coupling with the financial system continues to increase, breeding underground economic activities. In recent years, there have been a large number of cases of illegal crimes using virtual assets at home and abroad, posing a new and serious threat to investors' rights and interests, economic order, and financial security.
"Since virtual assets, especially virtual currencies, pose increasingly serious challenges to national monetary sovereignty, anti-fraud, anti-money laundering and anti-terrorist financing, international organizations and governments are strengthening virtual asset supervision." According to Gou Wenjun, my country is the first country in the world to regulate virtual currencies. Since 2013, a series of laws and regulations have been issued, denying the legitimacy of virtual currencies as currencies and securities in domestic transactions and free exchange from the institutional and execution levels.
As a new thing, virtual assets are subject to extremely fast innovation and iteration, which also puts forward higher requirements for risk supervision and governance of virtual assets. In Gou Wenjun's view, the risk governance of virtual assets should be focused on from four aspects.
First, clarify the non-financial attributes of virtual assets and improve the regulatory policies for emerging virtual assets. The derivation and changes of virtual assets will not stop at the current virtual currency, NFT, and various items in the metaverse. They are naturally isolated from the real world and have a certain degree of interoperability, making them very easy to become a tool for money laundering by criminals.
"We should maintain a consistent high level of vigilance, view the evolution of virtual assets and the development of underlying technologies with objective, neutral and prudent principles, clarify the division of regulatory responsibilities, improve the transparency of virtual assets, explore the use of regulatory sandboxes to judge the essence and effects of virtual assets, promote technological innovation and application that conforms to human values, respects ethics and is responsible, guide the market to abandon the fantasy of 'anarchy and decentralization', reasonably use the results of virtual assets, and avoid pan-financial packaging and speculation." said Gou Wenjun.
Second, strengthen the monitoring and analysis of virtual asset transactions, and identify the essence of virtual asset transactions. As the exchange link between legal currency and virtual assets, banks and payment institutions should authenticate virtual asset trading parties with real names, improve the ability to identify suspicious virtual asset transactions and fund transfer channels, focus on monitoring underground banks and virtual platform OTC merchants with concentrated associations, and report suspicious transactions in a timely manner.
Third, strengthen the innovative application of new technologies and establish a virtual asset transaction traceability and scenario tracking system. First, widely deploy address probes and apply artificial intelligence, machine learning and other technologies to label accounts that directly or indirectly trade with the probe address. Second, establish a transaction scenario feature value model to identify different transaction scenarios from massive transaction records through clustering and other technical means. Third, on the basis of address labeling and transaction scenario feature clustering, comprehensive law enforcement departments, trading platforms, overseas financial intelligence agencies, etc. share information, restore the real subject corresponding to the virtual account, connect the real identity, virtual asset account and transaction scenario in series, and expand fund monitoring from virtual scenarios to real scenarios.
Fourth, strengthen information sharing and cooperation with foreign financial intelligence agencies to form an international force to combat crimes using virtual assets. Virtual assets are global in nature. The Anti-Money Laundering Center will continue to deepen information sharing and joint investigation cooperation with 60 foreign financial intelligence agencies, trace the source and scene of virtual asset transactions, restore the entire chain of domestic and foreign transactions, and support law enforcement agencies in chasing fugitives and recovering stolen assets and combating various criminal activities. |
