According to a Commonwealth research carried out in eight member countries indicates that legitimate use of virtual currencies is widespread across a spectrum of different industries ranging from selling handbags in Nigeria to providing plumbing services in New Zealand. But findings also demonstrate an absence of legal and regulatory frameworks is increasing the threat of criminal exploitation.
Criminal use of virtual currencies mainly takes place in areas of the dark web or the hidden web making it very difficult for investigating authorities to determine the extent of illegal activity and take necessary action.
The survey shows the response from Commonwealth countries towards virtual currencies is mixed. In Bangladesh, for example, these transactions are illegal. Canada, on the other hand, recognises their legality and seeks to minimise the most high risk aspects while encouraging business innovation.
Virtual currencies do not have legal tender status in any jurisdiction. There are no internationally agreed standards or rules that can be applied to them. However, The Financial Action Task Force (FATF) released important guidelines in 2015 to address the associated risks.
Commonwealth Heads of Government identified cybercrime as a major obstacle to combatting the financing of terrorism and money laundering at their meeting in 2013. During a consultation in February 2015, it was agreed the Commonwealth would set up a specialist group to develop technical guidance for member states on potential regulatory and legislative measures to effectively respond to virtual currencies.
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