Cryptoasset exchanges provide essential liquidity to crypto markets – acting as vital gateways between the fiat and crypto-asset ecosystems. Thus, exchanges inevitably feature heavily in crypto asset-related money laundering activity.

1. MONEY LAUNDERING
CRYPTOASSETS
EXCHANGES
via
Your Legal & Financial Guide

2. Your Legal & Financial Guide
02
Cryptoasset exchanges provide
essential liquidity to crypto
markets – acting as vital gateways
between the fiat and cryptoasset
ecosystems. Thus, exchanges
inevitably feature heavily in
cryptoasset-related money
laundering activity.

3. Your Legal & Financial Guide
03
Criminals deliberately seek out
exchanges they know they can
exploit with little or no obstruction
when moving between fiat and
cryptoasset, or from cryptoasset to
cryptoasset.
01 USE OF NON-COMPLIANT OR
UNLICENSED EXCHANGES

4. Your Legal & Financial Guide
04
Exchanges that deliberately flaunt
regulation and registration requirements.
RED FLAGS
Exchanges that allow customers to set up
accounts with little or no identifying
information.
Exchange services that do not require
customers who open accounts to comply
with regulations in any jurisdiction.

5. Your Legal & Financial Guide
05
Criminals will often look to exchanges
that are in high-risk jurisdictions
when seeking to exploit. It can
include countries and regions that
has higher risk for cryptoasset-
laundering purposes.
02 USE OF EXCHANGES IN
HIGH-RISK JURISDICTIONS

6. Your Legal & Financial Guide
06
Countries and regions that are generally high
risk for money laundering and terrorist financing
purposes
RED FLAGS
Countries subject to international financial
sanctions, embargoes and other restrictions
Countries on the FATF’s list of High Risk and
Non-Cooperative Jurisdictions
Countries with no AML/CTF regulation around
cryptoassets, or with ineffective regulatory
frameworks.

7. Your Legal & Financial Guide
07
Criminals often rely on fraudulent
documents to open accounts in their
own names, or in the names of other
individuals. One method involves
employing money mules – individuals
who are used to open accounts and
move funds on behalf of the criminal
network.
03
USE OF MONEY MULES OR
FRAUDULENT DOCUMENTS
ON LEGITIMATE EXCHANGES

8. Your Legal & Financial Guide
08
A group of individuals – often of common
nationality and similar residential
addresses – establish accounts at a
cryptoasset exchange, generally within a
short time period of one another.
RED FLAGS

9. Your Legal & Financial Guide
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Adv. P. M. Mishra
Lawyer & International
Regulatory Expert