The FATF recommends that regulators and exchanges create profiles of cryptocurrency users to detect criminal activity.
The Financial Action Task Force (FATF) said in its report on Monday that it has identified certain behaviors and characteristics of cryptocurrency users that may be considered suspicious. Such models can be applied by regulators when detecting illegal transactions.
One of the main methods suggested in the report is to compare the user’s transaction activity with that in their profile. This may include cases where the amount of the deposit or transaction is inconsistent with the user’s financial position or historical financial activity, which may indicate money laundering or fraud. For example, it can be suspicious if a young user with no known business interests starts receiving large sums from different people around the world.
Other suspicious signs include a user having a criminal record or activity on websites and forums related to illegal activities, sending cryptocurrencies to exchanges without KYC / AML checks, or sending transactions that are slightly below the amount subject to regulatory review under the earlier FATF guidelines.
The group also recommends that regulators monitor users who exchange cryptoassets from public and transparent blockchains for sensitive cryptocurrencies such as Monero or Zcash.
The new report was released more than a year after the FATF published the final version of the recommendations on the regulation of cryptocurrencies and the activities of cryptocurrency service operators, which received support from the G20.
