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GFI Study Reveals Weak AML/CFT Measures in Latin America and the Caribbean

  • Richard Marley
  • November 15, 2022
  • 3 minutes read
  • 550
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The latest study by Global Financial Integrity (GFI) revealed that the Caribbean and Latin America have weak Anti Money Laundering and Countering Terrorism Financing (AML/CFT) measures

In a recent GFI report titled “Cryptocurrencies: A Financial Crime Risk within Latin America and the Caribbean,” the pros and cons of cryptocurrencies are analyzed, along with any possible threats to consumer financial security. The responses from the public and corporate sectors, as well as from academia and civil society, are also mapped in light of the fast-shifting regional dynamics. Five nations—Argentina, Brazil, Colombia, El Salvador, and Mexico—were chosen for the analysis because of their expanding crypto usage in addition to their distinctive legislative frameworks and domestic environments.

As per the President & CEO of GFI Tom Cardamone, “like other financial products or asset classes, the use of cryptocurrencies has become an issue when they are not regulated properly. This report is a warning siren to the looming threat of money laundering and other financial crime in the region,” he noted. “Financial integrity and transparency are key.”

Global Financial Integrity interviewed experts on the topic from the public, business, academic, and civic society for this study. GFI examined publicly accessible data, such as global practices, national laws, and best practices as part of the investigation. Interviews and research provide insight into the growth of cryptocurrency in the LAC region as well as the risks of its use in the absence of effective regulation.

The report contends that governments in the regions need to understand that cryptocurrency and crypto goods cannot be removed or disregarded. They stand for novel financial products that are expected to stay and need to be regulated to safeguard consumers, investors, and systems from the risks they carry, which are currently either not regulated or merely weakly managed.

Legal predictability, the study contends, is essential for efficient AML/CFT procedures, particularly in a dynamic context. The development of a nation can be supported by clear, strong norms that protect consumers and empower investors. The regulatory framework of cryptocurrencies need not result in these asset classes becoming legal tender; instead, these currencies as well as related goods and services should always be treated as a part of the AML/CFT framework. In this way, a regulatory system will serve to safeguard the users and investors who choose to use cryptocurrencies.

GFI is eager to collaborate with the government, civil society, as well as the private sector in order to effectively address the issues.

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