There is a growing concern that criminal networks may seek to circumvent global sanctions through the use of cryptocurrency. Refinitiv is working on promoting a more coordinated global response to financial crime, focusing on protecting the digital asset space.
- The digital landscape can be exploited by criminal networks seeking to leverage the booming cryptocurrency sector to avoid sanctions.
- The Digital Asset Task Force (DATF) is an expert committee comprising a range of industry leaders concentrating on the relationship between digital assets and financial crime.
- Refinitiv continues to encourage risk screening and to collaborate with global leaders to raise awareness of organised crime to help mitigate financial crime risk.
Hyper-digitalisation continues to sweep the globe, bringing with it speed, flexibility and 24/7 connectivity, but simultaneously allowing sophisticated financial criminals the opportunity to use technology to avoid detection.
There are serious questions about exactly how the digital landscape can be exploited by criminal networks seeking to leverage the booming cryptocurrency sector to avoid sanctions and move funds to and from sanctioned countries, entities and individuals.
Working to create a coordinated response
In 2018, Refinitiv co-founded the Global Coalition to Fight Financial Crime (the Coalition)1, a public-private initiative working to support and promote a coordinated global response to financial crime, bribery and corruption.
Since then, the Coalition has expanded to include 20 key international players. Together they work to raise awareness of the consequences of illicit activity, promote the effective sharing of information and resources, and advocate for tangible anti-financial crime reforms.
The Coalition notes that the market value of crypto assets continues to skyrocket and that, alongside this increased adoption, there is also greater regulatory and law enforcement scrutiny, and further that “global efforts are now underway to address the risks that this market is not used for illicit purposes but remains a safe, resilient, innovative and accessible market”.
The Digital Asset Task Force
Against this backdrop, the Coalition launched the Digital Asset Task Force (DATF) – an expert committee comprising a range of industry leaders concentrating on the relationship between digital assets and financial crime – in April 2022.
The DATF reflects the values and goals of the Coalition, specifically focusing on fostering collaboration, sharing information and leveraging technology to fight financial crime, bribery and corruption across the globe.
Among its immediate priorities, the DATF lists a specific focus on preventing sanctions circumvention by promoting compliance. The task force will undertake a range of initiatives in this regard, including:
- Raising awareness around the extent to which digital assets can be used to avoid sanctions.
- Promoting the screening of digital asset transactions to identify potential links with sanctioned persons.
- Encouraging the sharing of information between industry stakeholders and law enforcement.
Why collaboration is a powerful tool
The economic consequences of crime aside, sanctions evasion and other financial crimes have crippling humanitarian and societal effects across the globe.
The reputational damage of any connection to financial crime, bribery and corruption can seriously undermine public and investor trust.
Refinitiv recognises the far-reaching effects of illicit activity, as well as the power of collaboration in the fight against sophisticated financial criminals, and we are proud to be active members of both the Coalition and the DATF.
We deliver comprehensive data and advanced technology to help compliance teams pinpoint potentially illicit activity with speed and precision:
- Our industry-leading World-Check Risk Intelligence data and proprietary screening software help compliance teams optimise know your customer (KYC) due diligence processes and help you meet your regulatory obligations.
- Our client-friendly digital onboarding solutions improve compliance and speed up time-consuming manual processes.
- Our digital identity solutions leverage a combination of digital identity verification, document proofing and risk screening, as well as our World-Check risk screening capabilities.
Only by working together can we hope to make significant inroads into thwarting widespread illicit activity.
Refinitiv will continue to collaborate with global leaders to raise awareness of organised crime networks, expand our knowledge base and deliver valuable insights into a best-practice response to protecting the digital asset space and mitigating wider financial crime risk.
1. Additional co-founders include Europol and the World Economic Forum.