The nature of cryptocurrency fraud is shifting away from exchange hacks, and toward Ponzi-style frauds, pyramid schemes and exit scams. A massive 533% rise in the value of such crimes means that as misappropriated funds are laundered, the traditional banking system is increasingly exposed to risk under upcoming Financial Action Task Force (FATF) rules. That’s the conclusion reached by CipherTrace, a cryptocurrency intelligence firm, in a report released today.
The Travel Rule requires virtual currency businesses to “obtain, hold and transmit required originator and beneficiary information in order to identify and report suspicious transactions, monitor the availability of information, take freezing actions and prohibit transactions with designated persons and entities.”
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