Global Financial Integrity


Cryptocurrencies: A Financial Crime Risk within Latin America and the Caribbean

Anti-money laundering and countering terrorism financing (AML/CFT) standards in Latin America and the Caribbean have not kept pace with emerging technologies and asset classes, according to our latest report. As a growing number of consumers adopt the use of cryptocurrency, governments in the region have failed to prevent, detect, investigate and prosecute financial crimes that may arise in this space.

Our new report titled Cryptocurrencies: A Financial Crime Risk within Latin America and the Caribbean analyzes the benefits of crypto as well as the potential risks that may emerge, both for consumer financial protection as well as for financial crime. It also maps the responses from governments, private sector, academia and civil society in light of rapidly changing dynamics in the region. The report analyzes five countries – Argentina, Brazil, Colombia, El Salvador, and Mexico— selected because of rising crypto usage as well as unique regulatory aspects and domestic contexts.

GFI conducted interviews with subject matter experts from the public sector, private sector, academia and civil society. Also, we analyzed publicly available information, including national legislation, international standards and best practices. The interviews and analysis shed light on how crypto is developing in LAC and the risks of use when not regulated appropriately.

Governments in the region need to be aware that cryptocurrencies and crypto products cannot be eliminated or ignored, the report argues. They represent new financial products that are here to stay, and that must be regulated to protect users, investors, and processes of the inherent risks that, as of now, are either not regulated or only partially regulated.

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This report is part of a larger project by GFI that analyzes financial crimes in Latin America and the Caribbean. The project’s first report, Financial Crime in Latin America and the Caribbean: Understanding Country Challenges and Designing Effective Technical Solutions covered financial crime trends throughout the hemisphere. It looked at illicit proceeds from corruption, drug trafficking, mineral trafficking, trafficking in persons, and smuggling of migrants. Continuing with this effort, this report is part of a four-section initiative to understand financial crime threats in the hemisphere. The other reports are:

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