A virtual assets AML guidance is coming in force

Starting from July 2023, the guidance of the Central Bank of UAE (CBUAE) for licensed financial institutions on risks related to virtual assets will come into force. This document highlights the potential threats and risks associated with virtual assets and virtual asset service providers, including the existence of professional money laundering schemes that enable criminals to convert proceeds generated in virtual currency through illicit online markets.

According to the CBUAE, cryptocurrency, the most popular virtual asset, is considered a risky asset due to its decentralization and anonymity, which can facilitate illegal activities. To mitigate these risks, the financial regulator recommends that financial institutions implement specific preventive measures to identify, assess, manage, and mitigate the risks associated with virtual assets and integrate these measures into their AML/CTF compliance policies and programs. It is essential for financial institutions to comply with these guidelines to avoid any potential legal or regulatory consequences.