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3 JACL 1 (2019)

handle is hein.journals/jantcorul3 and id is 1 raw text is: CRYPTOLAUNDERING: ANTI-MONEY LAUNDERING REGULATION OF VIRTUAL CURRENCY EXCHANGES Stefan Mbiyavanga ABSTRACT Ten years on since their invention, virtual currencies are here to stay. However, virtual currencies come with money laundering risks. This paper discusses anti- money laundering regulation for virtual currency intermediaries, by showcasing and comparing regulatory models at the national and international levels. It is found that the anti-money laundering regulation for virtual currencies - more than being merely nice to have - carries considerable potential in the fight economic crime. Where financial intermediaries engaged in virtual currencies are required to gather the full spectrum of information needed to identify their customers and the source of funds, virtual currencies become much less attractive to money launderers than traditional fiat money systems. Furthermore, anti-money laundering regulation means that supervisory and investigatory authorities can identify and act against money launderers and other delinquents. 1 INTRODUCTION Virtual currencies, such as Bitcoin, as well as the technology that supports them, have created new options for the delivery of financial services. However, the rapid pace of innovations in virtual currency technology - as well as in the Fintech (Finance and Technology) sector in general - leaves regulators grappling to design adjusted legal frameworks. Notwithstanding all the excitement and hope, the risk of money launderers abusing these technologies on a large scale is serious. For instance, the United States Department of Justice reports that corrupt public * This is a revised version of a paper read by the author at the Economic Crime and Cybercrime Conference (ECCC), University of the Western Cape, 5 October 2018. ** MLaw, Doctoral Candidate (University of Basel, Switzerland). Email: s.mbiyavanga@unibas.ch. JACL 3(1) 2019 pp 1 - 15 1