AsianFin -- Researchers at the Bank for International Settlements (BIS) have proposed that cryptocurrency exchanges should prevent users from cashing out tokens deemed to have low “compliance scores,” in an effort to strengthen anti-money laundering (AML) enforcement.

In a new paper, the BIS team addressed a long-standing challenge for regulators: applying AML rules to permissionless blockchains, where transactions are open to anyone with an internet connection and no registration process.

While advocates say such networks can democratize finance and provide access to the unbanked, critics — particularly in public policy — warn that the lack of regulated intermediaries creates fertile ground for illicit finance.