The Financial Action Task Force (FATF) has released a new report titled "Disrupting the Full Chain of Illicit Financial Flows Linked to Scam Compounds," identifying virtual assets as a core money laundering channel for criminal networks operating scam compounds. The report reveals that criminals use cash, virtual assets, and instant payment platforms to launder funds, while leveraging AI, deepfakes, and automation technologies to scale their operations. In some cases, scam compounds house dedicated over-the-counter counters specifically for handling virtual asset exchanges and domestic fund transfers.
Blockchain analysis cited in the report found that more than $100 million in victim-remitted funds ultimately flowed into a cluster of virtual asset wallets associated with a single scam compound. FATF calls on countries to take coordinated global action to dismantle these criminal networks.
The task force outlined six core principles for combating illicit financial flows linked to scam compounds: focusing on the broader criminal ecosystem, blocking illicit flows end-to-end, strengthening cross-sector information sharing, enabling rapid cross-border action within 24–72 hours of an incident, adopting a victim-centered approach, and continuously adapting to evolving criminal methods.
FATF Report Identifies Virtual Assets as Core Money Laundering Channel for Scam Compounds
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