This paper identifies red flags signalling illicit virtual asset activity through analysis between 2023 and 2024. These red flags will help enhance the financial services industry’s understanding of illicit virtual asset activity and highlight concerns and considerations to ensure resilience.
The analysis focused on identifying behavioural and transactional patterns indicating unusual activity, during on-ramp and off-ramp transactions. On-ramp and off-ramp describes transactions moving from fiat currency to virtual forms and vice versa respectively. Insights were largely drawn from the five major New Zealand Banks and IRD, providing a cross-industry perspective.
The paper identifies opportunities and recommendations for all reporting entities and organisations interacting with virtual assets flows. Further background including the international and New Zealand context is provided, illustrating the significance of why all organisations connected to the financial sector must remain proactive and collaborative to manage emerging risks effectively. Continued cooperation among all stakeholders is essential to preventing financial crime and safeguarding the integrity of New Zealand’s financial system.