The world of crypto and virtual currency can be a little overwhelming. There are so many things to consider from a BSA/AML perspective. Still, even before you can do that, you have to have a basic understanding of what virtual currency is and some of the key terms and other lingo in this area.
Kevin explains more in the video.
Transcript:
As I said, terminology, we want to make sure we understand what these terms are. As I said, it's a virtual asset. Number one, it's a virtual currency, a digital representation of value. Blockchain, again, that's the electronic ledger that they use to track how these transactions work and which accounts have what type of value in them. The miners are the ones who are working to verify those transactions. Let's make sure we've got all of these terms that we understand because when we start talking about risks and specific things that you need to be on the lookout for, we all need to be on the same page with these terms.
Mixer and Tumblr service. Now, if you hear this term, your BSA AML red flag should go up a little because a Tumblr service is a service that goes out and mixes different types, streams of cryptocurrency, or identifiable accounts. As we said, there was a blockchain so that you could track the flow of funds through various accounts through that blockchain, and so you can track the assets that way.
Now, a Tumblr service is when they go through, and they mix what they call tainted funds, and it's funds that you can trace back either who they belong to or what the source was or where that source of funds works through the system. A Mixer takes a bunch of streams and mixes them to hide the source or make it more anonymous on where these funds are. If there's a mixing service involved, keep in mind if it sounds like money laundering, it's because it is. It's that whole layering process where you're trying to hide where the source of funds was and who they belong to at any given time. Again, it combines users' virtual currency with other users' virtual currency, making it very hard to trace.
Publish
2023/02/02
