GAFILAT

On January 20, The Financial Action Task Force of Latin America (GAFILAT in Spanish) published the Guide on Relevant Aspects and Appropriate Steps for the Investigation, Identification, Seizure and Confiscation of Virtual Assets (AV in Spanish). The document contains good practices, concepts and recommendations on the matter, based on a diagnosis made by the entity where it recognizes that cryptocurrencies represent the main method of payment in current illicit transactions given their characteristics such as their anonymity, decentralization and global reach. The established guidelines could be used by member countries as a basis for issuing regulations linked to the use of AV for laundering in the future. 

According to GAFILAT, the scope of the guidelines refers only to the investigation of money laundering conducts with AV, excluding the “Fintech” phenomenon in general. Thus, it is indicated that, within the problem, the focus is on centralized and decentralized assets, emphasizing the use of cryptocurrencies, including “stable-coins”, and on the actors included in the system such as exchange platforms, digital wallet providers and financial service providers linked to the issuance, offer or sale of AV. At this point, it points out that vulnerabilities would increase if these currencies were massively adopted, especially after the launch of stable-coins by large financial or telecommunications companies.

Thus, at the regional level, GAFILAT determines the need for a coherent and homogeneous regulation of AV, especially considering that, according to the document, 15 of the 17 countries in the region consider them as a potential source of laundering risk. Despite this, the document indicates that this warning has not been counterbalanced by the enactment of local rules to regulate it. On the other hand, taking into account that these activities take place in cyberspace, it determines the need to use techniques and tools that are adapted to it, together with the incorporation of digital or electronic evidence to prove the crime and the responsibility of the accused.