Cryptocurrencies and Virtual Assets

Virtual assets, or cryptocurrencies, have fundamentally changed the ways in which criminals, terrorists and hostile states operate their finances.




Criminals, the corrupt and kleptocrats are always one step ahead. From cryptocurrency tumblers and mixers to so-called ‘pig-butchering’ scams, bad actors and hostile states continue to find ways to exploit virtual assets. Regulatory gaps, the patchy implementation of global standards and a lack of enforcement have meant that virtual assets can be misused to circumvent sanctions, obfuscate the source of stolen funds, generate revenue for illicit activities and undermine political integrity. This highlights the need for a coordinated international policy response and robust supervisory mechanisms.

As countries implement the Financial Action Task Force (FATF) standards for virtual assets and consider their own regulatory framework, it is essential that policymakers, regulators, law enforcement and the private sector keep pace with developments in the virtual asset industry and understand risks and seek mitigations. Effective regulation and supervision are essential to both prevent illicit activity, and foster trust in the industry.

Our work identifies emerging threats from virtual assets, and the new ways in which they can be exploited for criminal and malign purposes. We provide evidence-based insights to strengthen policy and operational responses and prevent the expanded abuse of virtual assets. Beyond virtual assets, our work also explores the security dimensions of digital assets and related topics, including stablecoins, Central Bank Digital Currencies, Decentralised Finance and the fragmentation of the payments ecosystem.

Aims and objectives

Our work mixes evidence-based research with practical policy engagement. We combine analysis with our convening power, supporting the public and private sectors in developing effective regulatory and supervisory approaches, assessing virtual asset threats and strengthening global responses. Our key areas of focus include:

  • Providing guidance and practical support to policymakers and regulators, including training on integrating virtual asset risks into their National Risk Assessments.
  • Sanctions evasion through virtual assets and the policy responses needed to close loopholes exploited by states and malign actors.
  • North Korea’s use of cryptocurrencies to obtain, launder, and channel funds to finance its weapons of mass destruction programme.
  • Strengthening asset recovery mechanisms for stolen or illicit virtual assets and addressing the legal, technical, and operational challenges involved.
  • The use of virtual assets to launder the proceeds of organised crime, including drug trafficking and fraud.
  • Supporting Ukraine’s reconstruction efforts through a public–private partnership on virtual assets.
  • Analysing the use of cryptocurrencies in political financing and exploring the opportunities and challenges of adopting digital currencies in political fundraising.

Project team


Tom Keatinge

Director, CFS

Centre for Finance and Security

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Kathryn Westmore

Senior Research Fellow

Centre for Finance and Security

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Arzu Abbasova

Research Analyst

Centre for Finance and Security

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Eliza Lockhart

Research Fellow

Centre for Finance and Security

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Oksana Ihnatenko

Researcher for project SMURF, CFS

Centre for Finance and Security

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Associate Fellows


Dr Noémi També

RUSI Associate Fellow, CFS

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Adrian Searle

RUSI Senior Associate Fellow, CFS

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Denisse Rudich

RUSI Associate Fellow, CFS

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David Carlisle

RUSI Associate Fellow, CFS

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Isabella Chase

RUSI Associate Fellow, CFS

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Kayla Izenman

RUSI Associate Fellow, CFS

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Aidan Larkin

RUSI Associate Fellow, CFS

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Samantha Sheen

RUSI Associate Fellow, CFS

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Malcolm Wright

RUSI Associate Fellow, CFS

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Andrew Mackay

RUSI Associate Fellow, CFS

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CPF Technical Assistance Programme

CPF Technical Assistance Programme

Proliferation Financing Risk Assessment

Proliferation Financing Risk Assessment

National Risk Assessments

National Risk Assessments

Asset Recovery

Asset Recovery

Supervising and Monitoring Ukraine’s Reconstruction Funds (SMURF)

Supervising and Monitoring Ukraine’s Reconstruction Funds (SMURF)

Latest publications

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