Cryptocurrencies as a new money laundering tool: Proposals for Vietnam to regulate the issue

Abstract

Today, the world is in the development of the Fourth Industrial Revolution. This revolution has created many new products, new forms of transactions, new payment methods, new types of assets, etc. One of the outstanding innovations of this revolution is the introduction of Blockchain technology and cryptocurrency. However, some challenges relating to cryptocurrencies have been exposed to the States and governments. One of those challenges is money laundering. Besides the old methods, criminals have invented new methods to launder money using cryptocurrencies. Cryptocurrencies have provided criminals with the advantage of maintaining their identities anonymous due to the so-called blockchain technology. As a result, it is difficult to track the money laundering activities of the criminals. In the first chapter, cryptocurrency as a term will be defined and analyzed. In addition, blockchain technology will be examined, and the relation between the technology and cryptocurrency will be provided. Then, money laundering will be defined, and its methods using cryptocurrencies will be analyzed. In the second chapter, the study of the legal framework of the US and the EU will provide methods that these developed countries have used, as well as analyze the anti-money regulations relating to cryptocurrencies provided under the guidance of FinCEN of the US and the AMLD of the EU. Finally, the third chapter shall be a critical assessment of the current legal provisions of Vietnam towards money laundering through the use of cryptocurrencies. It will verify the deficiencies of the existing legal provisions. Then, based on the lessons learned from the US and the EU, this thesis gives recommendations and proposals to improve Vietnam’s legal provisions.