Once a tax haven, Gibraltar is now emerging as Europe’s hub for crypto trading. If Valereum, a blockchain firm, goes ahead with its plans for the acquisition of the Gibraltar Stock Exchange (GSX), the British overseas territory will become a center for the ultra-hot cryptocurrency market.
However, analysts are not ruling away weak or loose regulations that could ruin Gibraltar. The place is already known to harbor tax offenders. Experts fear it could also become home to crypto-savvy money launders.
Nathan C. Goldman, a professor of accounting at North Carolina State University, says cryptocurrencies are often seen aiding money laundering. He explained that digital assets facilitate money laundering by providing a platform for private transactions. And government or taxing authorities are not aware of these transactions.
Persons involved in this process, often purchase the cryptocurrency with illicit funds. It should be noted that crypto exchanges have varying regulatory requirements. Thus, the crypto can be moved from exchange to exchange, while allowing the purchases to go ahead.
Experts say lesser-known cryptocurrencies are used for such transactions. This is because lesser-known cryptocurrencies have less oversight and visibility. The cryptocurrency is then used to buy other cryptocurrencies and converted into well-known cryptocurrencies. Doing so allows the funds to be moved easily to different countries.
In regards to Gibraltar, Goldman said cryptocurrency in ‘whole’ is not used for money laundering. He pointed out that the majority of people or investors who trade cryptocurrencies are not money laundering. A leading expert, Carol Goforth believes it’s all hype. She says it is overblown.
Moreover, Goforth highlighted Gibraltar’s record of compliance with FATF AML requirements. She also said that a firm using distributed ledge technology is regarded as a relevant financial business with know your customer (KYC) and AML requirements.
