Topic: [2017-11-23] Whoever Converts Digital Currencies To Fiat Monies Should Beware (Read 1444 times)

KUALA LUMPUR: Whoever converts cryptocurrencies into fiat monies will be scrutinised under the anti-money laundering laws beginning next year, says Tan Sri Muhammad Ibrahim.

These “reporting institutions” will come under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

The Bank Negara governor said the move was to prevent abuse for criminal and unlawful activities and to ensure the stability and integrity of the financial system.

He said recent advancements in financial technology provided new opportunities for anonymity.

“The advent of digital currencies will mark the beginning of a new era in the financial sector and as authorities, we cannot be oblivious to these developments.

“As such, Bank Negara has initiated the development of a regulatory structure for digital currencies,” he said during the Third Counter-Terrorism Financing Summit 2017 here yesterday.

It was organised in partnership with the Australian Transaction Reports and Analysis Centre and the Indonesian Transaction Reports and Analysis Centre.

Muhammad told the delegates from over 30 countries that fund-raising through social media and other online platforms had increased in prominence.

He stressed that rapid technological developments offered immense potential for economic growth.

Unfortunately, these also spawned new ways for terrorist organisations to acquire, move and manage their funds, he added.

He suggested strategies that would erect stronger defences within the financial system.

The central bank is also finalising the details of a new requirement for the banking and money services business sectors to report remittances in high-risk areas. These will then be determined based on intelligence from law enforcement agencies on areas that may pose higher risks for terrorism funding.

“Greater access of intelligence information for financial institutions and the increased threats from the Islamic State had resulted in the upward trend of reporting of suspicious transaction reports (STR),” he said.

Between January and July this year, Bank Negara received 346 terrorism financing related STRs, which led to 34 disclosures to law enforcement agencies, compared to 93 in 2015, which led to 14 disclosures.

Read more at https://www.thestar.com.my/news/nation/2017/11/23/whoever-converts-digital-currencies-to-fiat-monies-should-beware/