'Cryptocurrencies Not a Threat' Says Hong Kong Report on Organized Crime

The Financial Services and Treasury (FSTB) of Hong Kong has released its Money Laundering and Terrorist Financing Risk Assessment report which indicates that cryptocurrencies are left out of organized crime or ML/TF concerns.

Amid the growing crypto-related regulatory chaos and tense debate on the matter of combating financial crime, the FSTB released a report which sheds light on a few key matters.

Crypto is Not a Threat. Period.

The cryptocurrency market has long been the subject of criticism and negativity – not just by so-called ‘experts’ but by government banks and agencies as well. To add insult to injury, the vast majority of the arguments against crypto lack any hard, verifiable facts.

Earlier in April, Mark Carney, Bank of England’s governor, once again bashed cryptocurrency, claiming that a ‘huge amount’ of illicit activity is run through cryptocurrency. Yet, the facts, as laid down in his own Treasury’s report had stressed that ‘risks of digital currency used for money laundering to be relatively low’.

Iran, on the other hand, issued a nationwide ban on cryptocurrencies that prohibited banks from dealing with virtual currencies. Fear of money laundering was one of the reasons given for the ban, however, in typical fashion, no hard facts were presented to back up the claims.

At the same time, the Center for Sanctions and Illicit Finance of the Defense of Democracies Foundation outlined in a study that a tiny 0.61% of the money which enters cryptocurrency trading and conversion platforms has been used against regulations.

Circling back to the recent report of FSTB, it goes on to further build on the premise that cryptocurrencies do not pose a threat and should not be regarded as means for illicit activities. The Hong Kong Police Force further reinforces the report’s opinion, admitting that they see absolutely “no apparent sign of organized crime or ML/TF concerning the trading of cryptocurrencies”.

There you have it – three completely independent sources from credible authorities have unanimously disclosed that cryptocurrencies are far from posing any measurable risk related to money laundering, finance terrorism, or other illicit activities of the kind.

Regulations Don’t Necessarily Prevent Illicit Activities

The other thing the report touched is the lack of definitive regulation around cryptocurrency trading in the country. The licenses required for Money Service Operators only pertain to those entities who deal with fiat currencies.

Yet, even they seem to be riskier than cryptocurrencies. According to the same report, the risk assessment of the Government towards Stored Value Facilities (SVF) much like the popular Alipay, PayPal, or Octopus Card, is measurably higher.

Do you think cryptocurrencies pose a threat in terms of being used for illicit activities? Please let us know in the comments below.

Images courtesy of Pixabay, Wikimedia Commons

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