German Ministry of Finance report: privacy and stable currency may lead to increased risk of money laundering and terrorist financing

According to foreign media, the German Federal Ministry of Finance expressed concern about the increasing use of privacy tokens because they are associated with criminal activities and are difficult to track.


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The Department’s National Risk Assessment for First Money Laundering and Terrorist Financing, issued on October 19, provides an identification of existing and future risks in the areas of German anti-money laundering (AML) and terrorist financing (TF). analysis. Among other challenges, the report also examines cryptocurrencies circulating in dark networks for criminal purposes.

Kana tokens and anonymous tokens

The report shows the difference between kana tokens and anonymous tokens, pointing out that pseudonyms can analyze transactions in public blockchains and evaluate suspicious activity, while completely anonymous tokens (such as Monero (XMR) and Zcash (ZEC)) Keeping transactions untrackable and therefore easy to use for illegal activities.

In this regard, the Ministry urges future monitoring of anonymous cryptocurrencies. The report pointed out that although the market value of such tokens is still relatively low, they are increasingly popular and accepted in the dark network, and may eventually become a real dark net substitute for bitcoin (BTC).

Risk associated with stable currency and cash

According to the report, the use of encrypted assets in terrorist financing is currently low. There is evidence that cryptographic assets are used in right-wing extremism and Islamism, but there is no reliable evidence that cryptocurrencies have been used more widely for terrorist financing.

The report pointed out that fluctuations in cryptocurrency have prevented it from being used as a means of payment to some extent. However, according to the report, stable currencies linked to valuable assets or fiat currencies can ensure value stability and may therefore lead to increased risk of money laundering and terrorist financing. The report further wrote:

“The use of cash has no traceable footprint and is easy to handle compared to the use of anonymous cryptographic assets, so it can be assumed that, for example, funds transfer in the field of terrorist financing and fund remittance service providers are currently continuing through cash courier companies.”

On October 21st, Kenneth Blanco, director of the US Financial Crimes Enforcement Network (FinCEN), said that financial technology companies that provide anonymity for cryptocurrency users must “follow the anti-money laundering laws, just like everyone else.”

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