The Anti-Money Laundering Challenges of FinTech and Cryptocurrencies

Abstract

In the aftermath of the 2008 global financial crisis, the foundation was developed for the protocol we know as blockchain. Blockchain is a system through which money can be sent from one person to another without using any financial service providers. It has been argued that the security of blockchain technology could be the answer to people’s mistrust and lost confidence in the financial market. However, blockchain technology and cryptocurrencies go much further than a mere transfer of money. New forms of value exchange have been created, in addition to providing access to financial services in locations where only limited services are offered by traditional banks. As the use of such innovation gains popularity, the legislator is slowly catching up, but how much is covered?

This paper studies FinTech and cryptocurrencies in respect of money laundering. It is found that the current regulatory landscape has several weaknesses that can be attractive for those wishing to exploit them.