There is widespread disagreement over cryptocurrency risk. Those working in the cryptocurrency industry are much more upbeat about the opportunities such innovations as Bitcoin represent than governments and financial institutions, says a recent survey.
While criminals use cryptocurrency, those transactions only accounts for around 1% of the global total. Yet the perception of risk remains high – especially outside of the crypto industry, said the RUSI-ACAMS cryptocurrency risk and compliance survey.
“All respondents accept that cryptocurrencies are vulnerable to criminals. Still, the sharpest distinction between the cryptocurrency industry and the other surveyed sectors is on the significance of the inherent risks and the effectiveness of the cryptocurrency industry’s internal controls,” said the report. “Cryptocurrency industry respondents optimistically view their AML/CTF preparedness and the comprehensiveness of their internal controls.”
Half of respondents (51%) believed cryptocurrency exchanges were unprepared to deal with cybercrime. Yet most cryptocurrency industry respondents (83%) agreed that cryptocurrency transactions were more transparent than traditional financial transactions. The cryptocurrency industry also agreed (85%) that cryptocurrency is compatible with sanctions screening and transaction monitoring. All other industries were more likely to disagree with that statement.
On the other hand, respondents agreed the media, politicians, or members of the public who did not own cryptocurrency understood cryptocurrency financial crime risks well.
Most survey respondents said they expected more guidance from governments and non-governmental bodies. Plans to regulate the currency have not gone smoothly.
“There appears to be a consistent approach between the Financial Action Task Force and national regulators on the implementation of cryptocurrency regulation,” the report said. “With the expectation that the industry should look to both their national regulator and the international standard setter for guidance.”
Most respondents said that cryptocurrencies were too volatile to act as alternative to government-issued paper. On the other hand, the survey found optimism for the future.
“Overall, respondents are more likely to agree than disagree that in five years, cryptocurrency will be an effective tool for financial inclusion,” the report said. “Respondents still believe that the main use of cryptocurrency in five years will be investment and speculation, but day-to-day payments ranks second, with illicit purposes moved to third.”
The survey defined cryptocurrency as payment tokens (such as Bitcoin) as opposed to stablecoins (such as Libra) or central bank digital currencies.