Cryptocurrencies and Virtual Assets

Virtual assets, or cryptocurrencies, have fundamentally changed the ways in which criminals, terrorists and hostile states operate their finances.

Criminals are always one step ahead. From tumblers and mixers to so-called ‘pig-butchering’ scams, criminals continue to find ways to exploit virtual assets. Sanctioned states and malign actors misuse virtual assets to circumvent sanctions, obfuscate the source of stolen funds and generate revenue for their proliferation activities.

As countries implement the Financial Action Task Force’s standards for virtual assets, it is essential that policymakers, regulators, law enforcement and the private sector keep pace with developments in the virtual asset industry in order to understand the risks and seek mitigations.

Our work identifies emerging threats from virtual assets, and the new ways in which they can be used for criminal purposes, with the aim of ensuring a robust response and preventing the expanded abuse of virtual assets. Beyond virtual assets, our work also explores the security dimensions of digital assets and related topics, including Central Bank Digital Currencies, Decentralised Finance and the fragmentation of the payments ecosystem.

Aims and objectives

Our work is a mixture of evidence-based research, convening workshops and roundtables on emerging risks, and supporting the public and private sectors in understanding and assessing virtual asset threats. Key areas of focus include:

The way in which North Korea seeks to obtain, launder and use cryptocurrencies to finance its development of weapons of mass destruction.
The potential for other countries to use virtual assets for sanctions evasion.
The practical challenges associated with the recovery of virtual assets, and how global efforts on asset recovery can be improved.
The role of virtual assets in laundering the proceeds of organised crime, including drug trafficking and fraud.
The use of virtual assets for the reconstruction of Ukraine.
Providing guidance and practical support to institutions carrying out virtual asset risk assessments.
Delivering training and interactive workshops on emerging risks and how countries can incorporate virtual asset risks in their National Risk Assessments.