Evaluation of Risk-based Prevention Approach to Criminal Risks of Virtual Currencies

Abstract

Technological phenomena, despite facilitating human life, pose challenges of economic and social dimensions. Therefore, exploring challenges and finding ways to reduce their potential and real risks has always been one of the fundamental human questions. A clear example is the technological phenomena of virtual currency, which, along with all the benefits and positive functions, has paved the way for change and innovation in committing some crimes. This has accelerated the process of globalization of crime and has had a significant impact on the criminal environment by extending beyond the geographical borders of a country. Therefore, the actors of the criminal justice system, according to their inherent duties, should control the criminal capacities of this technology as much as possible by setting up an optimal response system. Undoubtedly, like other areas of crime response, action response is a priority in this area. This has also been the focus of the FATF Financial Action Task Force. Within the framework of its risk-oriented approach to money laundering, the group emphasizes the selection of a risk-averse approach to the risks of virtual currencies. It seeks to extend the risk-based prevention approach to this technology, including the requirements for preventing money laundering on virtual currencies. However, the evaluation of the recent approach shows that relying on it alone is not effective enough and the existence of some challenges has prevented its full success. This is evaluated in the present study with a descriptive and analytical look to reveal its various dimensions.

Keywords

• virtual currencies
• risk prevention
• financial action task force