The Economic Crime and Cooperation Division is developing a methodology to identify and assess the national risks related to virtual assets and virtual asset service providers, in accordance with the FATF requirements for risk assessment and particularly with the new FATF Recommendation 15 and updated guidance on supervision of this sector. The online workshop was organised on 31 March 2021 gathering key stakeholders and experts, including participants from the private sector, academia and competent authorities of Australia, the Netherlands, Serbia and Ukraine, as well as Europol. The meeting aimed to improve and update the draft risk assessment methodology and ensure that it can be used to carry out sufficiently detailed and comprehensive risk assessments of the sector.

Virtual assets (VAs) are seen as an important and dynamic risk area in many jurisdictions, as their anonymous or pseudonymous nature makes them an attractive means of hiding the illicit origin of funds for certain types of criminals. As such, governments all over the world are facing the significant challenge of developing appropriate responses to effectively regulate and supervise VAs and related services to ensure an appropriate balance between opportunities and risks associated with these products and services.

In this regard, the workshop provided an overview of the current approaches to assessing risks in order to ensure appropriate regulatory, supervisory and oversight approaches, and drew on the participants’ experiences and identified good practices.

As a risk assessment of the virtual assets sector involves the collection of huge amounts of data on different virtual assets and virtual asset service providers, the Council of Europe methodology will support the authorities with collecting this data in a consistent manner and identifying the key risk factors and the process of assessing those risks in light of the country’s social, economic, political and geographical context.

Risk assessments such as this provide crucial understanding to national authorities on the risks of VAs being used for the purposes of money laundering or terrorist financing and are thus a key step towards the implementation of an effective risk-based approach to supervision of virtual assets and virtual asset service providers.