Development of Financial Intelligence Unit’s expertise focused on digital finance and virtual assets

This project supports the French Financial Intelligence Unit (FIU), Traitement du renseignement et action contre les circuits financiers clandestins (Tracfin) in enhancing its internal expertise in the areas of digital finance and virtual assets.

Due to the growing complexity of the financial ecosystem and the fast pace of innovations in the field, investigation blind spots are more likely to happen. Proactive engagement is needed for the FIUs to quickly adapt the investigation practices and approaches and tackle the emerging areas of risk (digital finance and virtual assets in particular).

Context

Digital technologies are now widespread in every sector of traditional banking. Therefore, there is an urgent need for FIUs to develop a solid knowledge and experience in digital finance (mobile banking, e-commerce, contactless payments, FinTechs, open finance, Money Service Businesses, asset management) and virtual assets (crypto-assets, virtual assets service providers (VASPs).

Support delivered

The project is carried out with the support of the Economic Crime and Cooperation Division in the Council of Europe, which has substantial experience in AML-CFT supervision and investigation.

The project will provide the French authorities with a cross-border diagnosis of capacities and capabilities required for addressing risks related to virtual assets and digital finance. Exchanges of views with two other FIUs (Belgium, Luxembourg) are also scheduled. Then, a training plan will provide a basic knowledge base for all Tracfin’s agents (analysts and investigators), followed by more advanced modules for certain agents (operational agents and cyber-specialists), adapted not only to their level of expertise and duties, but also to the operational needs of the FIU. Train-the-trainers’ modules will be included to ensure sustainability of the capacity development.

Expected results

The project will contribute to a better understanding, identification and mitigation of AML/CFT emerging risks related to digital finance and virtual assets. The FIU aims at developing robust investigating techniques to remain an effective link between private supervised entities (subject to AML/CFT obligations) and law enforcement agencies. The outcomes of this project will allow Tracfin to enhance its digital investigations and analysis capacities as well as its adaptation of operating procedures to digitalisation in finance.