The Anti-Money Laundering and Countering the Financing of Terrorism Industry Partnership (ACIP), a joint public-private initiative in Singapore, has recently published a comprehensive best practice guide. This guide focuses on managing potential risks associated with money laundering, terrorism financing, and sanctions tied to customer relationships in the digital assets sector.
On a Twitter thread, Chainalysis, a well-known platform for investigating cryptocurrency, announced that ACIP had shared a guide on how to avoid money laundering.
This essential document scrutinized three categories of customer relationships: Digital Payment Token Service Providers (DPTSPs) and Financial Institutions (FIs) engaged in digital asset services; legal entities that operate with digital asset-based business models; and individuals who majorly rely on digital assets as a substantial source of wealth.
The guide offers extensive advice to mitigate potential risks and pitfalls, proposing specific measures customized for each type of customer relationship. To illustrate the implementation of these risk management practices, the document features seven practical case studies. These case studies explored diverse situations, including onboarding DPTSPs, tracing the origin of wealth, and conducting on-chain screenings to manage money laundering, terrorism financing, and sanctions risks.
Another crucial aspect of the guide is its emphasis on the importance of blockchain analytics. This tool is singled out for its ability to enhance due diligence and surveillance operations, its applications stretching across the entire Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) process. The guide encourages FIs to assess the unique capabilities offered by each analytics tool, as their functionalities might vary considerably.
The guide, which combines valuable insights from banks, regulators, law enforcement agencies, and DPTSPs, is primarily addressed to FIs. However, it also provides valuable insights for players in the digital asset sphere, helping them understand their banks’ risk management objectives and processes. By offering such wisdom, it aims to foster the development of stable banking relationships that are instrumental for the growth and stability of the digital assets ecosystem.
