The technological revolution implies great risks and opportunities.

We are in the midst of a financial technology revolution. A large number of changes generate risks and provide considerable opportunities.

It is extremely important to understand where these risks come from, including reputational and operational ones, given that the legal framework is under development. The crypto ecosystem must also be understood as well as how to establish regulatory frameworks since we are in the midst of said revolution. Distribution channels are increasing and cryptocurrencies are also growing, generating a global push to regulate this area.

Deep Web versus Dark Web

According to Raymond Villanueva, member of the Association of Certified Anti-Money Laundering Specialists (ACAMS), the Deep Web is the Internet that is not indexed to protect information. It is legal, commonly used, and contains a privacy system that protects documents, transactions, and databases, among others.

The Dark Web, for its part, is a decentralized system of Dark nets that are accessed using browsers, such as TOR (for its acronym The Onion Router), or P2P (Friend to Friend), among others. This makes it possible to hide the IP address and other information that makes it difficult to trace the identity of users.

It is in this area where international security agencies have found the largest movement of cryptocurrencies to finance crimes. A large number of complex money laundering schemes through cryptocurrencies have not been registered, but their use to finance criminal activities such as the sale of illegal weapons, narcotics, explosives, large-scale child pornography – where pay for access to sites with cryptocurrencies-, and the evasion of sanctions. In addition, they have been used to finance terrorism, explains Raymond.

Complex money laundering schemes have not yet been identified in which money that comes from illicit activity is moved in order to give it the appearance of legitimacy, as established by the academic definition of money laundering. In contrast, the American legal definition of money laundering criminalizes putting money from illicit activity in contact with a business transfer. In this case, giving the appearance of legitimacy to the money is not a factor, as long as it comes from or supports a specific illegal activity. These two definitions do not collide but complement each other. The legal definition is more comprehensive since its intention is to limit the movement of illicit money, and/or directed to support illicit activity through financial systems.

Use of Cryptocurrencies is not illegal

It is important to understand that the use of cryptocurrencies is not illegal, the crimes discussed here are also committed with fiduciary currency. In fact, one of the advantages of cryptocurrencies is that they are not completely anonymous, on the contrary, they are transparent, traceable, public, permanent, and programmable. What’s more, the process is repeatable, efficient, and fast. For this reason, it is important to have continuous education, training, and knowledge in Blockchain, technology, and regulation, all of which is in a process of continuous evolution, given the vulnerability of virtual assets, their volatility, and value fluctuations.

When evaluating the use of virtual currencies and assets, including “Smart Contracts”, we must look at it holistically since we need to know about international regulations, technology, international trade (imports and exports), international fluctuations, sanctions, and political changes. , legal and economic that may affect your business operations. The most sensible recommendation is in line with the global trend, it is about paying attention to this issue to accept it and manage it effectively since it is here to stay.

By Audy Castaneda


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