UN Officials – Cryptocurrencies Are Making Child Trafficking, Money Laundering “Exceptionally Difficult”

A top United Nations (UN) official stated cryptocurrencies are making international efforts to combat terrorist financing, money laundering, and cyber-crime “exceptionally difficult.”

Neil Walsh, chief of the Cybercrime and Anti-Money Laundering arm of the UN’s Office on Drugs and Crime, mentioned that the anonymizing and pseudo-anonymizing attributes of cryptocurrencies present a “new layer of secrecy that favors the criminals,” when speaking to the Australian Broadcasting Corporation’s Linda Mottram.

Specifically, Walsh raised concerns about the position cryptocurrencies to play in the clandestine child trafficking industry.

“Up to now, once we checked out among the big high-threat areas like kids getting abused online, it needed to be paid for, and now, with using cryptocurrencies, it’s challenging for investigators to trace that and try and manage that risk down,” Walsh mentioned.

Further, Walsh stated efforts should target crypto exchanges the place illicit funds may be washed. Added security protocols wouldn’t interfere with the average person, he instructed, as “there isn’t a large amount of threat round declaring who you’re and that you have an interest in transferring value.”

Walsh highlighted efforts put ahead by the Financial Action Task Force (FATF) as one possible way of monitoring which could be transferring value using cryptocurrencies.

In June, FATF, the intergovernmental group committed to battling money laundering and terrorist financing, finalized its recommendations on regulating cryptocurrencies for its 37 member countries, including a rule that “virtual asset service providers” (VASPs), which means crypto exchanges, constitute the so-called “travel rule.”

Under this condition, exchanges and wallet providers could be required to have know-your-customer(KYC) data not just for their users, but also for the users of wallets or exchange accounts that funds are being sent to.