UK Treasury: Money laundering risk is lowest through electronic currency

Author: Geneva Image source: Dazhi

A UK government report released last month said electronic money was a low-risk way to launder money and finance terrorism.

In the national risk assessment report released by the UK Treasury on October 15, the government stated that electronic currency is the lowest risk of all money laundering channels, and cash, banks, and accounting services are also on this list.

"The risk of money laundering through electronic money is low, but could increase if electronic money becomes more common in the UK," the report said. Currently, there are relatively few examples of money laundering involving technology, with most criminals conducting transactions on illegal websites.

According to the report:

“The number of case studies that can be used to conclude that e-currency is used for money laundering is small. Many people are concerned about anonymity, faster payments, and whether it can provide cross-border remittances and facilitate international trade. These issues are similar to other financial instruments, such as cash and e-currency.”

But the report said there was evidence of money laundering at the transaction level reported by law enforcement agencies.

"Law enforcement has observed a limited number of cases where criminals have used large amounts of licensed money services business funds to purchase electronic currency from traders," the report said. Law enforcement believes this method was developed as a way to evade retail banking.

Furthermore, there is little evidence that money laundering specialists are using electronic currencies on behalf of traditional criminal groups.

The report also said that there was insufficient evidence to suggest that terrorists use electronic currencies to transfer money or finance their activities, adding:

“There is little evidence that terrorists use electronic money to finance terrorist activities, whether as a means of raising funds (crowdfunding, etc.), paying for infrastructure (such as renting servers), or transferring funds.”