Identifying and Reducing the Money Laundering Risks and Vulnerabilities Associated With Virtual Assets: The Case of Nigeria

Abstract

PURPOSE – This paper aims to shed light on the use of virtual assets as an alternate currency by criminals, and discuss the various anti-money laundering programmes that a Virtual Asset Service Provider is required to put in place, to mitigate money laundering risk(s). DESIGN/METHODOLOGY/APPROACH – This paper relies mainly on primary and secondary data drawn from the public domain. It also relies on documentary research. FINDINGS – This paper determined that the money laundering risks associated with Virtual Assets may be reduced if Virtual Asset Service Providers register as money service businesses and implement a written anti-money laundering (AML) program that, at a minimum: (a) incorporates policies, procedures and internal controls reasonably designed to assure ongoing compliance; (b) designates an individual responsible to assure day to day compliance with the program and regulatory requirements; (c) provides training for appropriate personnel, including training in the detection of suspicious transactions; (d) provides for independent review to monitor and maintain an adequate program; (e) provides for the filing of suspicious activity reports and currency transaction reports; and (f) establishes a record keeping programme. ORIGINALITY/VALUE – This paper aims to help build awareness with the regulatory, enforcement and customs authorities as well as reporting entities about money laundering risks and vulnerabilities of Virtual Assets, and how to mitigate them.