Virtual services under money laundering radar
As anti- money laundering, terrorism financing and proliferation financing watch heightens across the globe, government has taken a step, putting a spotlight on virtual assets and virtual service providers.
Through a National Coordinating Committee on Financial Intelligence, established via the country’s Financial Intelligence Act, the recently launched National Risk Assessment ( NRA) 2022/ 23 has included a vulnerability module on virtual assets and virtual service providers.
The NRA has been launched to give a comprehensive assessment of the conditions likely to affect the stability of the domestic financial system.
“We are looking at identifying risk associated with virtual providers and apply a risk based approach to VAs and VASPS and act effectively to mitigate those risks,” said Susan Mangori, NRA Lead Consultant.
Permanent Secretary to the President, Emmah Peloetletse, who also doubles as the chairperson for National Coordinating Committee on Financial Intelligence said the country cannot escape the monitoring of virtual assets.
“Changes and developments in the global financial landscape call for commensurate interventions. In this regard, the FATF is continuously effecting changes in the anti- money laundering standards to ensure that jurisdictions are not caught unaware by the changes but are able to apply risk based supervisory measures,” said Peloetletse. The Financial Action Task Force ( FATF) is an inter- governmental policy making body whose purpose is to establish international standards, and to develop and promote policies, both at national and international levels, to combat money laundering and the financing of terrorism. Peloetletse further said the NRA will help us as a country to prevent and combat money laundering, terrorism financing and proliferation financing and avoid Botswana being used for commission of financial offences.
Meanwhile, Chief Executive Officer of the Non- Bank Financial Institutions Regulatory Authority ( NBFIRA), Oduetse Motshidisi said the development is part of the financial systems revolution globally. “So we have to work on the basis that virtual assets are here to stay and grow,” said Motshidisi, adding that the Authority and government has to make sure that there is capacity to deal with issues from licensing point.
“In time, monitoring of money- laundering in virtual assets will become like any other function that is part of the non- banking financial operations,” said Motshidisi, adding that the framework for licensing needs to be robust enough to pick up and prevent entities that pose launderings risk in virtual assets. He further said NBFIRA has not yet picked any threats of money laundering on the local market.
Last month, Pan- African cryptocurrency exchange Yellow Card Financial secured a Virtual Asset Provider licence in Botswana, the first time this type of licence has been issued in the country.
NBFIRA says the licensing of Yellow Card Botswana is a demonstration of the continued growth in depth and dynamism of the local market, in alignment with international developments. Yellow Card Financial’s licencing in Botswana comes after the company closed a $ 40M Series B funding led by Polychain Capital, with participation from Valar Ventures, Third Prime, Sozo Ventures, Castle Island Ventures, Fabric Ventures, DG Daiwa Ventures, The Raba Partnership, Jon Weiner, Alex Wilson, Pat Duffy, and more.
According to authorities from the company, the funding will finance expansion across the continent, develop new products and advance strategic partnerships. Yellow Card Botswana operates as a virtual asset service provider in accordance with Section 11 of the Virtual Asset Act, 2022, after it satisfied the licensing requirements.