This guide is designed to provide a standardised approach to assessing financial crime risk within the cryptocurrency industry. It documents observed and emerging risks to allow institutions to identify high-risk activities and determine strategies to tackle such risks.
The process of identifying crypto-related financial crime red flags within the private sector lacks uniformity. Two centralised cryptocurrency exchanges with similar risk appetites, services and transaction volumes can have different criteria to determine what qualifies as a high-risk transaction. To compound this problem, the institutional risk assessments that crypto businesses create are often proprietary. Publicly available guides on how to successfully assess risks within this fast-paced industry are non-existent. The private sector, including virtual asset service providers (VASPs) and financial institutions (FIs), needs such a guide to assess risk, identify suspicious activity and flag the information to the relevant authorities.