While the popularity of virtual worlds has grown in recent years, lawmakers and regulators have been slow to address related vulnerabilities to financial crime, according to Dr. Clare Chambers-Jones, an associate professor in banking and finance law at the University of West England Bristol.
The U.S. Justice Department will begin this year refunding customers of a defunct digital currency company that paid nearly $3.3 million to settle sanctions and anti-money laundering violations.
An emerging virtual currency intended to be used in lieu of cash could also be a vehicle for criminals seeking to make international transactions anonymously, according to investigators.
A digital currency company has incurred a nearly $3 million penalty for sanctions violations less than a year after its directors agreed to pay $300,000 to settle anti-money laundering deficiencies.
Online digital currency business E-Gold and its three principal directors admitted late Monday to laundering money and operating as an unlicensed money transmitting business.
If online payments system e-gold, Ltd. is convicted on charges of operating as an unlicensed money services business and other crimes, significant changes could be in store for similar digital currency businesses and the banks that service them.
Several money services businesses have closed since regulators designated them as high-risk for money laundering.
print