Mitchell Spragg (Harvard University, Harvard Law School) has posted “Catch Me If You Can”: The Challenges Of Regulating Virtual Assets In Accordance With International Anti-Money Laundering Standards, published in 75 University of New Brunswick Law Journal 211, on SSRN. Here is the abstract:
Renowned for its pseudonymity and decentralized nature, virtual asset technology has emerged as a felicitous avenue for money launderers. In response to the anti-money laundering (AML) risks associated with this nascent technology, the international money laundering ‘watchdog’ known as the Financial Action Task Force (FATF) has recently provided specific guidance for regulators in each country to implement. While this guidance provides a strong base framework, there are three core challenges that regulators will face in their implementation of this guidance: (a) bureaucratic delay, (b) regulatory arbitrage, and (c) industry pushback. This article suggests that any research pertaining to virtual asset regulation, especially within the context of international AML efforts, should directly address these challenges head-on. It is important to keep these topics top-of-mind, such that regulatory efforts are most effectively designed, and the “big picture” is not missed. By directly addressing the challenges discussed in this article—along with the broad suggestions to mitigate each of these challenges—regulators will be able to effectively mitigate the AML risks associated with virtual asset technology in compliance with the newest FATF guidance.