Cryptoasset Gambling: The European Gaming and Betting Association (EGBA) outlines in its “Guidelines on Anti-Money Laundering” the importance of establishing robust KYC protocols to prevent money laundering through online gambling platforms (EGBA, 2020). The FCA also highlights the need for firms to have systems in place to detect potential money laundering activities, including those involving cryptoassets (FCA, 2020).

• Unlicensed, unregulated, or Tor-based gambling: The Gambling Act 2005 is the main piece of legislation governing gambling in the UK, including online gambling. Section 33 of the Act makes it an offence to provide facilities for gambling without the appropriate licence.

• Absence of KYC protocols: The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) require businesses to establish and maintain policies for the identification and verification of customers.

• Gambling sites without public ownership information or jurisdiction: The Companies Act 2006 (Section 162) requires companies to keep a register of its directors, which must be available for inspection.

• No limits on volumes and values of cryptoasset used: The FCA has published guidance that states cryptoasset firms must have systems in place to limit and control risks arising from customers transacting in high volumes (FCA FG19/2).

• Use of mixers before or after depositing/withdrawing at gambling sites: The FATF’s Guidance for a Risk-Based Approach to Virtual Assets (2019) highlights this as a risk factor indicating potential money laundering activities.

Cryptocurrencies Swapped for In-game Currencies: The risks associated with the exchange of cryptoassets for in-game currencies is a growing concern. The UK Gambling Commission’s position paper on “Virtual currencies, eSports and social casino gaming” (UKGC, 2017) warns of the potential for these platforms to be used for money laundering. The FCA has similarly issued warnings about the risks associated with in-game currencies and the lack of regulatory oversight (FCA, 2021).

• Large volumes or values of cryptocurrencies deposited or received at an exchange over a short time period: The FATF’s Guidance for a Risk-Based Approach to Virtual Assets (2019) and the FCA’s FG19/2 both indicate that unusually large transactions, or high volumes of transactions over a short period, can be indicative of money laundering.

• Individual unable to explain why they require significant value swaps: The Joint Money Laundering Steering Group’s Guidance (JMLSG, Part I, Section 5.3.17) suggests that where the nature or purpose of a transaction appears unclear or illogical, this could be a sign of money laundering.

• Use of unregulated exchange sites, or sites that require no KYC information: Both the FCA’s FG19/2 and the FATF’s Guidance for a Risk-Based Approach to Virtual Assets (2019) stress the risks associated with unregulated sites and those that do not implement KYC measures.