The Joint Chiefs of Global Tax Enforcement, including tax agencies from Australia, Canada, the Netherlands, the UK, and the USA, have issued a warning about cryptocurrency risks to financial institutions. The alert focuses on privacy and anonymity concerns that may indicate criminal activity, such as transactions involving privacy coins, minimal identity disclosures, and the use of peer-to-peer platforms that evade traditional financial scrutiny.

The guidance document, titled "Crypto Assets Risk Indicators," identifies 42 specific risk factors. These include:

• Rapid fund transfers between crypto accounts without clear reasons

• Dealings with high-risk jurisdictions, and

• Connections to darknet marketplaces.

The group emphasises the importance of enhancing 'Know Your Customer' practices and monitoring financial flows linked to potential cybercrimes, including ransomware. This initiative reflects ongoing efforts to integrate the cryptocurrency sector more fully into global regulatory frameworks.

Read more regarding the risks in the Advisory Note to Financial Institutions here.