Fraudulent Activities in Cryptocurrency on the Rise in Armenia: Experts Warn of Increased Risk Exposure

As cryptocurrency continues to gain popularity as an investment instrument, experts are sounding the alarm about the increasing risk of fraudulent activities in Armenia’s digital market.

The Growing Concern

According to a recent report by the Association of Certified Fraud Examiners, 8 percent of all global fraud cases involved the use of cryptocurrencies. In Armenia, where cryptocurrency transactions have become increasingly common, financial institutions are struggling to stay compliant with anti-money laundering regulations.

• Only 20% of those owning digital assets in Norway declared their wealth on tax returns last year, sparking concerns about tax evasion and money laundering.
• The lack of regulations and consumer protections makes it difficult to track and trace cryptocurrency transactions, leaving them vulnerable to fraud.

Regulatory Challenges

In Armenia, where cryptocurrency trading is becoming more widespread, financial institutions are struggling to keep up with the increasing demand for digital payment solutions. However, without adequate anti-money laundering measures in place, the risk of fraudulent activities remains high.

• Financial experts recommend that financial institutions implement a risk-based framework and conduct due diligence on cryptocurrency exchanges used to convert funds.
• Blockchain analytics tools can also be used to trace transactions and detect suspicious activity.

The Risk of “Privacy Coins”

However, some cryptocurrencies, such as “privacy coins” like Monero, are designed to conceal the senders, receivers, addresses, and amounts of transactions. These coins pose a significant risk for money laundering and terrorist financing, experts warn.

Staying Vigilant

As Armenia’s financial institutions navigate this complex landscape, it is crucial that they stay vigilant and implement robust compliance measures to detect and prevent fraudulent activities.

• The Financial Supervisory Authority has taken steps to address the increased risks of money laundering by making cryptocurrency transactions subject to enhanced customer due diligence.
• More needs to be done to ensure that Armenia’s financial institutions are equipped to handle the growing demand for digital payment solutions.

Conclusion

While cryptocurrency holds great potential for innovation and growth, it is essential that financial institutions in Armenia prioritize anti-money laundering measures and stay alert to the increasing risk of fraudulent activities in this rapidly evolving market. By doing so, they can ensure a safer and more secure environment for investors and users alike.