Anti-money laundering regimes: a comparison between Germany, Switzerland and the UK with a focus on the crypto business
| DOI | https://doi.org/10.1108/JMLC-06-2021-0060 |
| Published date | 29 August 2021 |
| Date | 29 August 2021 |
| Pages | 656-670 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Christoph Wronka |
Anti-money laundering regimes: a
comparison between Germany,
Switzerland and the UK with a
focus on the crypto business
Christoph Wronka
Deloitte and Touche GmbH Wirtschaftsprüfungsgesellschaft, Hamburg, Germany
Abstract
Purpose –This paper aims to examine theframework for the regulation of crypto assets in Germany, the
UK and Switzerland focusing on anti-moneylaundering (AML) laws. It comprehensively addresses the risks
of crypto assetsand the benefits along with the changes made to the existinglaws to regulate cryptocurrency.
Design/methodology/approach –Qualitative data was analyzed to collect information for the case
study and to challenge/examinethe existing data and statistics.
Findings –The findings suggested that the AML laws are additionally modified to include the
cryptocurrencies violations of the legislation, as it is the decentralized financial systems generating
opportunitiesfor crimes and terror financing. The moderate or mild laws werefound in Switzerland following
Germanyand the UK has the most traditionaland stringent laws of money laundering.
Originality/value –The paper has focused on the comparison of the three states in their AML laws
comprehensivelyalong with their attitude toward the crypto businesses.
Keywords Financial regulation, Cryptocurrencies, Anti-money laundering laws, Germany,
Switzerland, The UK
Paper type Research paper
1. Introduction
This paper will critically examine the anti-money laundering (AML) regimes of Germany,
Switzerland and the UK with a special focus on the “crypto businesses.”There is a
framework for the regulation of crypto businesses to avoid money laundering. In actual,
there is no special law for cryptocurrencies, but the AML laws handle the same. Crypto
businesses raise two main challenges; the first challenge is the high risk of financing
terrorism and the second challenge with the crypto businesses is the regulation in addition
to centralization under the regulations of the state (Buttigieg et al.,2019;Boehm and Pesch,
2015). AML laws modified to have the crypto businesses under government control are
insufficient to address all the provisions of cryptocurrencies and their characteristics.
Cryptocurrencies are decentralized, and hence, the businesses based on these virtual
currencies are also decentralized in terms of payments/transactions and databases. This
causes pressure on the state to track down all the transactions and keep the record. The
legitimate use of cryptocurrencies has become a challengingtask for the states and there are
some banks that have refused to accept cryptocurrencies as an exchange, to avoid coming
under the scrutiny of the state AML laws and their provision of knowing your customer
(KYC) (Preller, 2008). One of those banks is HSBC in the UK which has stopped accepting
cryptocurrencies. Contrary to banks, the business circles are promoting the use of
cryptocurrency due to the expectation of its efficacy and use in the businesses for several
JMLC
25,3
656
Journalof Money Laundering
Control
Vol.25 No. 3, 2022
pp. 656-670
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-06-2021-0060
The current issue and full text archive of this journal is available on Emerald Insight at:
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