Growth Of Blockchain In Malta Created Significant Risks Of Money Laundering: IMF

The International Money Fund conducted a mission and has since judged that the growth of blockchain in Malta poses a serious risk of money laundering opportunities and terrorism funding and can potentially harm the economy of the country according to the reports coming into our daily crypto news.

The article from the Times of Malta suggests that during a visit to the island, the IMF isolated the blockchain alongside the other financial sectors and other citizenship-by-investment schemes as being a high-concern because of anti-money laundering compliance violations.

The Maltese government already passed three crypto-related bills with hopes to boost innovation and establish a transparent crypto regulatory climate.

Joseph Muscat, the Maltese prime minister, has happily endorsed cryptocurrencies as one of the investable forms of money in the future claiming that the blockchain technology will have a massive, transformative impact on the civil, political and corporate applications.

The IMF warned Malta to ensure its local authorities and urged the country to bring crypto service providers with the AML requirements. Malta’s Financial Intelligence Analysis Unit has already implemented multiple measures but it seems that there are plenty of loopholes in the enforcement systems.

Among the many recommendations, the IMF said that more sanctions should be imposed because of potential regulatory breaches:

 “The increasing number of financial entities under supervision, the rapid development of new products, the evolving regulatory environment and the tightening of the labour market have put the Malta Financial Services Authority under considerable strain.”

The IMF has also advised the Marshal Islands to hold back on the idea of issuing their own national cryptocurrency because of the same reason- money laundering.