Hong Kong Central Bank Flags Blockchain Money-Laundering Risk

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November 11, 2016

The Hong Kong Monetary Authority has released a sobering assessment of blockchain — the much-hyped technology some banks are researching to cut costs including a warning that it may raise the risk of money laundering.

The anonymity afforded by some distributed ledger platforms may facilitate illicit activities such as the trafficking of criminal gains, the sale of illegal goods and ransom payments, the HKMA said in a study on the technology released Friday. While the report highlighted blockchain’s cost and time-saving qualities, the technology predicated on a shared network of transaction records also offered legal, risk management and regulatory issues, the HKMA said.