AML for a blockchain age

Neal Christiansen, Valerie-Leila Jaber, Grant Rabenn and Melissa Strait
Additional contact information
Neal Christiansen: Senior Counsel, Coinbase, USA
Valerie-Leila Jaber: Global Head of Financial Crime Compliance, Coinbase, USA
Grant Rabenn: Director of Financial Crimes Legal, Coinbase, USA
Melissa Strait: Chief Compliance Officer, Coinbase, USA

Journal of Financial Compliance, 2023, vol. 7, issue 2, 148-159

Abstract: Blockchain technology is not only unlocking important innovations in financial systems, it is also the foundation for powerful new tools used to combat illicit finance. This paper describes some of the ways that this technology not only enhances traditional compliance tools but also goes further, offering investigators unprecedented access to transactional data. The result is that virtual asset service providers, unlike traditional financial institutions, are not limited to static or opaque stores of customer information but can instead conduct more sophisticated analyses that are faster, more reliable and more dynamic than what was previously available. Given this new compliance landscape, this paper sheds light on where the most significant illicit finance threats are in the cryptocurrency ecosystem and, further, how regulators can support the development and adoption of powerful new compliance tools, including those using novel digital identity systems.

Keywords: virtual assets; cryptocurrency; virtual asset service provider; VASP; blockchain analytics; know your transaction; KYT; decentralised identity; DID (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2023
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