Lagarde did not provide specific examples of money laundering cases but said she understood there had been criminal investigations into illegal activity. She did not elaborate.
Bitcoin has come out of its niche in recent years and is now bought by ordinary people, investment funds and even large corporations.
(Bitcoin) is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity,
Bitcoin fell as far as $33,447, its lowest since Jan. 6. Ethereum which often moves in tandem with bitcoin, fell as much as 20% to a one-week low of $1,007.51.
The world's most popular digital currency slid to as low as $36,618.36 on Bitstamp exchange before bouncing back. Rival cryptocurrency ethereum rose 3% after sinking more than 10%.
We are seeing a continued demand spike driven largely by sustained and unprecedented institutional interest.