Bitcoin facilitates terror financing, money laundering, UBS chairman warns

Crypto-currencies such as Bitcoin at worst facilitate the financing of terror, money laundering and other criminal activities, said Axel Weber, chairman, UBS Group. They are open to abuse and Switzerland as a financial centre needs to be careful not to take risks, he told the bank’s annual general meeting.

He spoke out at a time when UBS, as it said in its 2017 annual report, is acting to improve, among other things, its counter-money laundering, but there can be no assurance its efforts will have the desired effect, and so the “level of risk with respect to regulatory enforcement may be greater than that of some of our peers”. “Not all aspects of blockchain and digital currencies are desirable. For example, we take a critical view of crypto-currencies such as Bitcoin and the like. They are often not transparent and are therefore open to abuse,” Weber said.

“At best, they are highly speculative investment vehicles, and, at worst, they facilitate the financing of terror, money laundering and other criminal activities. We need to be aware of these risks,” he said. “Switzerland as a financial centre needs to be careful not to take any risks that damage its reputation,” he said.

There is no doubt, however, that UBS must actively embrace digitization, he said, noting that in each of the next few years, the firm will invest about 10 percent of its profits in further technological development. In its 2017 annual report, UBS said that a major focus of U.S. and other countries’ governmental policies relating to financial institutions recently had been fighting money laundering and terrorist financing, and the bank was subject to laws related to corrupt and illegal payments to government officials.

“Failure to maintain and implement adequate programs to combat money laundering, terrorist financing or corruption, or any failure of our programs in these areas, could have serious consequences both from legal enforcement action and from damage to our
reputation,” it said.

Produced by Thomson Reuters Accelus Regulatory Intelligence 11-May-2018
Published 09-May-2018 by Alex Davidson, Regulatory Intelligence

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