A summary of the risk assessment of money laundering and terrorist financing for virtual asset service providers has been published
The Financial Supervisory Authority (FIN-FSA) has published a summary of its assessment of the sector-specific risks of money laundering and terrorist financing for the operations of registered virtual asset service providers.
According to the FIN-FSA’s assessment, the overall risk for virtual asset service providers at the sector level is significant, the second highest on a four-step scale. The risk associated with the products and services provided by the sector is very significant, as they enable cross-border person-to-person payments in near real time. In addition, in many cases it is very difficult to identify the parties involved in virtual asset transfers. With a few exceptions, however, operations in the sector are still so limited in terms of number of customers and geographical scope that the risk level for the sector as a whole remains significant.
With regard to risk controls, there are significant shortcomings in the sector, for example in risk assessment and in organising operations as required by regulations. There is also room for improvement in procedures for ongoing monitoring of customer relationships.
National regulations on virtual asset service providers have been replaced by Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA Regulation). Entities entered in the register of virtual asset service providers must apply for authorisation in accordance with the MiCA Regulation if they intend to continue their operations. In the authorisation process, the FIN-FSA will pay particular attention to the fact that procedures for the prevention of money laundering and terrorist financing have been arranged in accordance with the regulatory requirements.
For further information, please contact
Viivi Jantunen, Senior Specialist, telephone +358 9 183 5008 or viivi.jantunen(at)fiva.fi