The U.S. Treasury announced last week that money-laundering rules and reporting requirements will now apply to all virtual currency providers and business exchanges, according to a March 21 article in the Wall Street Journal .

Virtual currencies have been on the periphery of AML since the post Sept-11 era, but in recent years the growing popularity and use of virtual currencies such as “bitcoin” has raised concerns that they could be easily used to fund illicit activities.

In 2012, the European Central Bank issued a report entitled “Virtual Currency Schemes” with a warning about them. And a dedicated FBI report, also released in 2012, included a statement that ” Bitcoin might logically attract money launderers, human traffickers, terrorists, and other criminals who avoid traditional financial systems by using the Internet to conduct global monetary transfers.”.

Virtual currency has become a sizable and growing financial market. According to the ECB’s report, it is now estimated to be around $500 million in the U.S. and nearly $2 billion in China. Virtual currencies are earned through massively multi-player online games (MMOs) like World of War Craft, Farmville or Second Life, but they can also be traded on exchanges and have their own exchange rates with known currencies. One of the biggest virtual currencies trading exchange, Japan-based Mt. Gox, had a volume that ranged from about $427,000 to just over $8 million a day, according to Bitcoin Charts, which provides financial and technical data related to the Bitcoin network.

“Bitcoin” as a currency is not currently backed by any central bank or controlled by any country’s treasury. Its currency units consist of a series of numbers, which are created automatically on a set schedule and traded anonymously between digital addresses or “wallets.”

Virtual world transactions appeal to users because transactions without financial institution backing can be executed from around the globe, even in the most remote areas. For that reason, law enforcement, regulators and financial institutions have expressed concerns about the hard-to-trace attributes of virtual currencies. This has culminated in the latest announcement made by the Treasury’s Financial Crimes Enforcement Network. The requirement outlines that businesses who conduct virtual currency businesses will be required to adhere to anti-money laundering (AML) book keeping requirements and mandatory reporting for transactions greater than $10,000.

Exprentis’s Inc. Regulatory Knowledge Base, which already captures Anti Money Laundering (AML) behaviors, can be quickly extended to accommodate the mandatory AML requirements for virtual currencies .