Francesca Cassidy-Taylor examines the financial crime risks posed by the metaverse

The metaverse’s potential for attracting criminals was detailed by Francesca Cassidy-Taylor.

In a piece, which was published by Solicitors Journal, Francesca outlines the risk of money laundering and other forms of financial crime in the virtual world.

She explains that as the metaverse has no central authority and no way of holding people to account, it offers the perfect situation for those looking to disguise the proceeds of crime. For money launderers and anyone else looking to make illegal financial gains, the metaverse’s anonymity and the opportunity it offers to hide behind avatars or conceal the origins of funds in digital wallets is very appealing.

Francesca adds, however, that such activity is known to the authorities, with the European Union’s Markets in Crypto Assets (MiCA) regulation proposal drawing cryptoassets, cryptoasset issuers and cryptoasset service providers (CASPs) into a regulatory framework for the first time. But some have said this regulation is not comprehensive enough.

There is, according to Francesca, a need to both ensure that regulation does not hamper innovation and clarify how jurisdiction regarding the metaverse will be determined in practice. She details some proposals that could address the problem but concludes that , for now at least, those using the metaverse for illegality are a step ahead of the authorities.

The full article can be read here.