FINTRAC recently published its guidance for money laundering and terrorist financing (ML/TF) providing indicators to help identify suspicious virtual currency transactions.
Further to industry papers such as the Financial Action Task Force (FATF) report published in September 2020, FINTRAC's 26 indicators are examples that should be considered in the context of each reporting entity. Among the ML/TF indicators proposed are those that relate to:
Transactions and their patterns such as high volumes and frequency of transfers between different types of virtual currencies.
Anonymity such as the use of anonymous client email addresses obtained through an encrypted email service
Senders or recipients such as a client who is unwilling or unable to provide information about the source of privacy coins they once held or currently have
Source of funds such as virtual currency fund origination from an over the counter trade broker that advertises its services as privacy-oriented/anonymous
Geographical risks such as virtual currency addresses that are on recognized watch lists
To view the full list, refer to FINTRAC's guidance available here.
To find out more on FATF report on ML/TF red flag indicators, refer to AMEIS' industry news.