Innovative policy solutions to mitigate money laundering risks of virtual assets

Why is this project relevant?

The OSCE’s project on innovative policy solutions to mitigate money-laundering risks of virtual assets was launched in 2022 to help participating States respond to the growing use of digital assets for illicit purposes.

While cryptocurrencies and other virtual assets drive innovation and financial inclusion, they are also being misused to conceal illegal funds, avoid financial oversight, and bypass regulations. Unregulated trading platforms and weak controls make it difficult for authorities to trace transactions or identify those behind them.

Across Eastern Europe, the South Caucasus and Central Asia, governments are working to balance innovation with security. However, they continue to face challenges such as limited oversight, emerging technologies, and gaps in enforcement. The OSCE supports these efforts by strengthening the capacity of institutions to manage virtual asset risks and safeguard financial integrity across the region.

What are the approaches applied and expected results?

The project combines policy support, institutional strengthening, and practitioner training to help participating States prevent the misuse of virtual assets and ensure safe, transparent digital finance environments.

Approaches include:

• Capacity-building: providing practical training for law enforcement, prosecutors, and financial intelligence officials to understand, investigate, and respond to crimes involving virtual assets.
• Policy and legal support: assisting governments in developing and updating national frameworks in line with international anti-money-laundering standards, and supporting the drafting of virtual asset regulations.
• Awareness and cooperation: fostering dialogue among practitioners, regulators, and policymakers through regional workshops, conferences, and knowledge-sharing initiatives.
• International coordination: promoting stronger cross-border collaboration to trace and prevent illicit financial flows and ensure consistency in oversight practices.

The OSCE’s role and added value lie in its early and comprehensive engagement in this complex area. As one of the first international organizations to address the risks of virtual assets, the OSCE applies its decades-long experience in combating money-laundering and financial crime to a rapidly evolving digital context. Its neutral platform brings together governments, experts, and international partners to share good practices, strengthen legislation, and build practical skills. By combining policy expertise with hands-on training and international cooperation, the OSCE helps its participating States navigate the challenges of digital finance, ensuring innovation goes hand in hand with integrity and security.

Expected results:
Public institutions become better equipped to identify and prevent financial crime involving virtual assets. Legal and policy frameworks are modernized, regional cooperation is enhanced, and participating States are more resilient against money-laundering and related risks.

Who are the parties involved?

The project is implemented by the OSCE Secretariat’s Office of the Co-ordinator of Economic and Environmental Activities (OCEEA) with extrabudgetary contributions from Germany, Italy, Poland, Romania, the United Kingdom, and the United States.

It supports OSCE participating States across Eastern Europe, the South Caucasus, and Central Asia, engaging ministries of finance, financial intelligence units, prosecutors, and law enforcement agencies.

Partnerships with international organizations such as the UN Office on Drugs and Crime (UNODC) and other expert bodies help ensure that participating States have access to global good practices and technical expertise to address evolving challenges in digital finance.