Identifying red flags can help organizations mitigate the risk that accompanies virtual asset transactions.
Managing the risks of the unknown is similar for fiat and virtual assets, but it is different enough to warrant that organizations update and tailor their programs to address the specific risks that each asset type can present.
For those who work in traditional financial institutions (FIs), virtual assets and the transactions occurring at virtual asset service providers (VASPs) might seem like an enigma. But the indicators of illicit activity are largely similar. Virtual asset transaction red flags mimic the red flags that anti-money laundering (AML) investigators and transaction monitoring systems identify within fiat transactions, and identifying those red flags is key to mitigating risk.