The Bank for International Settlements (BIS), a leading international financial institution, has unveiled a proposal aimed at enhancing anti-money laundering efforts in the cryptocurrency market. The BIS aims to implement an AML compliance scoring system specifically tailored for cryptocurrencies. This system would be designed to identify and track cryptocurrencies associated with illicit activities. 🧐 The scoring system proposed by BIS researchers utilizes investors’ cryptocurrency transfer history as key information to determine a score, highlighting those with suspicious activity. Notably, the BIS suggests that cryptocurrencies linked to criminal wallets or protocols frequently used in money laundering could receive lower scores. Further, the proposal emphasizes country-specific thresholds for converting cryptocurrencies into fiat currency. This mechanism allows each nation to establish their own risk assessments and limit conversions if a cryptocurrency’s score falls below a predetermined threshold. 🔐 The BIS believes that this proposed system can bolster security by reducing illicit funds flow within the cryptocurrency ecosystem, while also increasing trust in institutional investors as well as traditional finance systems. 📈 However, the BIS maintains its skeptical stance on cryptocurrencies, citing potential financial instability risks and challenges to regulatory oversight. It’s important to remember this is not investment advice.