The UK's Treasury released a National Risk Assessment study last month, claiming that digital currencies such as Bitcoin have a lower risk rating compared to other money laundering methods, including cash, banks and accountancy services.

The report states that, while criminals are using digital currencies to move criminal proceeds, predominately for the sale and purchase of controlled substances and firearms, there is limited understanding of the use of digital currencies for money laundering.

The main reason, however, for the low risk of money laundering in digital currencies such as Bitcoin is that they are not widely understood or used among the general population. The assessment adds: “if the use of digital currencies was to become more prevalent in the UK this risk could rise.”

The UK government warns that the size and complexity of the UK financial sector means it is more exposed to criminality than financial sectors in many other countries, “including abuse enabled by professional enablers in the legal and accountancy sector”.

The report also underlines the importance of compliance in the financial sector: “The majority of those working in the regulated sector are not complicit in money laundering or terrorist financing. However those working in the regulated sector may aid those involved in money laundering, either unwittingly, or through negligence or non-compliance. Non-compliant or negligent professionals have the potential to cause significant harm by facilitating money laundering and causing reputational damage to their profession.”