PHOTO: JACK GUEZ / AFP
The Paris-based Financial Action Task Force (FATF) said recent “virtual assets” such as cryptocurrencies and related services had great potential to improve financial innovation and efficiency.
But “they also create new opportunities for criminals and terrorists to launder their proceeds or finance their illicit activities”, the FATF said in a report.
The paper comes after G20 finance ministers in March asked the task force to look into cryptocurrencies, in particular the question of how to subject them to the same rules as traditional finance.
“All jurisdictions should urgently take legal and practical steps to prevent the misuse of virtual assets,” the report said.
The possibility of using virtual assets while remaining anonymous is of particular concern to governments, who fear it makes a whole range of illicit activities like money laundering, terror finance and tax evasion much easier than before.
The FATF was created in 1989 with the aim of making the international financial system more transparent by inciting members and aspiring members to adopt legislation, notably against money laundering and terrorism financing.