The Financial Action Task Force (FATF) has warned that firms need to understand properly the dangers posed by virtual currencies in order to defend themselves against the risks they pose. Valerie Schilling, FATF senior policy analyst, said that the organisation had been looking closely at the issue of virtual currencies and that there were some 'powerful tools' out there. She said the products carried some significant risks, pointing to both Silk Road and Liberty Reserve, which allegedly used virtual currencies to fund wide-scale criminal enterprises involving billions of dollars. "If you don't understand these risks then it is pretty hard as an institution to mitigate these risks," she told delegates at the British Bankers Association financial crime conference on Tuesday. She said that the cornerstone of the risk-based approach, which underpins FATF's 40 recommendations, should involve firms using their resources effectively. She added that there was not a one-size fits all approach
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