Sustainably Investing in Digital Assets Globally

Chapter 12Money Laundering

FinCEN's Bitcoin regulations, which imposed registration requirements on money services businesses (MSBs), were enacted in 2013. This allowed US law enforcement and agencies to use the long arm of the law to work collaboratively with global law enforcement and agencies and with private technology companies in multijurisdictional investigations to shed light on criminals who laundered cryptocurrencies by using them in drug weapons sales, cybercrime transactions on cryptocurrency exchanges, wallets, and darkweb markets.¹

Given the financial risks of ransomware and money laundering that digital assets pose globally, participants of the G7 meeting in June 2021 committed to working together to urgently address this escalating risk effectively and expeditiously by implementing and enforcing the Financial Action Task Force's anti–money laundering (AML) standards on digital assets and virtual asset service providers.

Here are some of the important cases to date:

• 2013: US law enforcement and agencies, with the assistance of various global law enforcement and agencies in a multijurisdictional investigation, cracked down on cybercrime by shutting down $6 billion Costa Rica–based virtual currency exchange Liberty Reserve and popular drug trafficking dark web market $1.2 billion Silk Road for money‐laundering transactions for the first time in Bitcoin's history. A person who robbed the website Sheep Marketplace of 96,000 Bitcoins—about $100 million at current ...