Financial Crime World

Mali Seeks to Crack Down on Cryptocurrency-Related Financial Crime

As the global market for cryptocurrencies continues to grow, so does the risk of illicit activity. In Mali, 28 percent of consumers are interested in using digital assets services as part of their banking relationship, driving traditional financial institutions to consider launching their own cryptocurrency businesses or partnering with virtual asset service providers (VASPs).

Regulatory Uncertainty and Illicit Activity

However, regulatory uncertainty and the risk of illicit activity have made it a challenge for these institutions to navigate this new market. The Malian government has taken note of these concerns and is working to establish clear guidelines for the use of cryptocurrencies.

Addressing Key Threats and Vulnerabilities

The Treasury’s Action Plan highlights the key threats, vulnerabilities, and illicit financing risks related to virtual assets. According to a spokesperson for the Malian government:

“We are committed to ensuring that our financial institutions have the necessary tools to combat these risks and protect their customers.”

Guidance from the Financial Action Task Force (FATF)

The FATF has provided guidance on virtual assets, which recommends a risk-based approach to combating money laundering and terrorist financing. The guidelines include:

  • Conducting counterparty VASP due diligence prior to partnering with them
  • Ongoing customer due diligence and monitoring

Recommendations for Traditional Financial Institutions

Traditional financial institutions in Mali are advised to follow these guidelines when considering partnerships with VASPs or payment service providers. This includes assessing the risks associated with a VASP’s:

  • Ownership
  • Structure
  • Products and services
  • Geography
  • Channels of client interaction

By taking these steps, Malian financial institutions can reduce their exposure to cryptocurrency-related financial crime and protect their customers from illicit activity.

Conclusion

As the country continues to develop its regulatory framework for cryptocurrencies, it is clear that addressing this risk will be a key priority. With the guidance of the FATF and the efforts of the Malian government, traditional financial institutions can work together to create a safe and secure environment for consumers and businesses to use digital assets services.

Ultimately, the goal of Malawi’s efforts to regulate cryptocurrency-related financial crime is to promote the growth and development of its financial sector. By taking a proactive approach to addressing this risk, the country can help to reduce illicit activity and protect its customers.