Could banning virtual assets be a breach of the doctrine of legitimate expectation?

Abstract

Purpose

This paper aims to examine the validity of a state’s prohibition on virtual assets in the context of its global commitment to battle against money laundering.

Design/methodology/approach

This was empirical legal research exploring how a general lack of expertise to apply a risk-based approach in anti-money laundering strategies might have implications for invoking the Financial Action Task Force (FATF) exclusion provisions in virtual asset regulation.

Findings

Invoking the exclusion provisions for banning virtual assets without meeting the prerequisites may put the financial system at risk and make a jurisdiction’s legal obligations appear breached.

Research limitations/implications

Anti-money laundering (AML) policymakers will take precautions and avoid misuse of the liberties they enjoy under FATF exclusion clauses/provisions.

Practical implications

The results of this study will help ensure more informed decision-making on the legal status and regulation of virtual assets.

Originality/value

The study helps ascertain the limits of privileges accorded to states under FATF exclusion provisions in applying global standards against money laundering.

Citation

Haq, M.Z., Farzana, K.F. and Md, M. (2022), "Could banning virtual assets be a breach of the doctrine of legitimate expectation?", Journal of Money Laundering Control, Vol. 25 No. 4, pp. 719-729. https://doi.org/10.1108/JMLC-07-2021-0077