Analysis: What the Vatican does to stop money laundering

By Andrea Gagliarducci

.- The Council of Europe’s Moneyval committee has praised the Holy See’s financial intelligence unit, the Financial Information Authority, in a report published last week.

The report noted the progress the Holy See has made in establishing an effective reporting system for suspect transactions, and in its international cooperation with investigation and reporting of financial irregularities. The report recommended that the financial authority “actively pursue” pending criminal cases of money laundering.

Moneyval is the Council of Europe’s “Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism.” It evaluates how financial systems in European states work to counter money laundering and stop the flow of funds to organizations connected to terrorism.

The progress report is part of the Moneyval’s regular evaluation procedure, which it conducts for all members.

The Holy See applied to Moneyval in 2011, after issuing its first anti-money laundering legislation. Moneyval issued a general “mutual evaluation report” on the Holy See and Vatican City State in July 2012. That evaluation called for improvements to the Holy See’s financial oversight procedures, which the Vatican has since pursued.

After the first general report, each state is called to report on its progress the year after the general evaluation, and to submit subsequent progress reports every two years.

The Holy See submitted a progress report in 2013, 2015 and now in 2017. The next report will be submitted in 2019, and it is expected that there will be an on site visit by Moneyval inspectors in the course of 2018.

The reports’ data confirm that Vatican is now in the third phase of implementing effective protections against money laundering.

The first phase, “the assumption of responsibility,” led to a Monetary Convention between the Holy See and European Union in 2009, and Benedict XVI’s motu proprio that established the first Vatican anti-money laundering laws at the end of 2010.

The second phase was “debugging financial transparency reforms.” The Vatican’s anti-money laundering law was amended and substantially re-written, and this led to a generally positive evaluation by Moneyval. In 2013, the Vatican financial system was furtherly improved with the issuance of additional laws and policies.

The third and current phase is that of improving the effectiveness of the system.

The progress report highlights a sort of “two speed” situation for Vatican financial reforms. While the overall system is working, the court system still needs to be developed, as reports on suspected money laundering did not lead to prosecutions.

Both Monyeval and Holy See Press Office releases acknowledge that the Holy See’s Financial Intelligence Authority (AIF) has carried out a significant work in the past two years.

According to Moneyval, the Holy See “has established a functioning reporting system.”

“In the past two years,” a Dec. 8 Moneyval release said, “the Holy See has established a functioning reporting system. Both the AIF and the judicial authorities have sought and were responding to international cooperation requests in their work.”

The AIF has established 24 new Memoranda of Understanding with foreign financial intelligence units and 4 new Memorandum of Understanding with supervisory authorities.

The Holy See recieved 380 requests for cooperation from foreign authorities in 2015, a number that increased to 837 in 2016, probably due to the Institute for Religious Works remediation process that led to the closure of about 4,800 IOR accounts. In 2017, the number of international cooperation requests decreased to a total of 104.

Beyond the data on international cooperation, the report also provides data about money laundering investigations.

Since Jan. 2013, the report says, “69 disseminations to the Promoter have been made by AIF where money laundering was suspected”. The Promoter for Justice – the Vatican prosecutor – opened 27 criminal distinct investigations out of the 69 AIF disseminations.

Of those investigations, 8 investigations “have been closed formally without any charges”, while 6 investigations concluded without an indictment and their formal closure has been requested. There are currently 8 criminal investigation open as money laundering investigations.

These facts also bring to light the main problem highlighted by the Moneyval report.

The Moneyval report noted that “the Holy See had still not brought a money laundering case to court”.

The committee stressed that “while considerable amounts of assets continued to be frozen, no criminal case had yet produced a confiscation order.”  For this reason.  “Moneyval recommends the Holy See ensure that the money laundering aspects of all outstanding investigations in criminal cases by proactively pursued”.

“In this regard, the committee noted that the overall effectiveness of the Holy See’s engagement with combating money laundering depends on the results that will be achieved by the prosecution and the courts,” the release concluded.

However, there have been steps forward on the side of the Holy See’s judicial system that show how the Vatican is working to meet the requirements of its new money-laundering laws.

A Holy See Press Office release delivered Dec. 8 underscored that Moneyval welcomed “the creation of a specialized Economic Financial Crimes Investigation Unit within the Corps of the Gendarmerie and the appointment of a specialized Assistant Promoter of Justice.”

These two steps are crucial in making of the Vatican City State judicial system more prompt in prosecuting suspect money laundering cases.

It must be clear that the report is not about particular cases, and does not review any internal problem. Without naming them, the report describes five cases of Vatican trials that involved financial issues – some of them more recognizable, and some of them not.

But Moneyval is called to assess if the financial system to counter money laundering and financing of terrorism works, and not to judge on singular cases. The report is not in any way related to situations like, for instance, the recent firing of Giulio Mattietti, adjunct director to the IOR, which led to much speculation on the state of Vatican finances reforms.

It was a positive sign that the Vatican’s progress report was approved within Moneyval’s regular process. Otherwise, the Vatican would have had to submit a new report in a future plenary session.

The committee’s approval shows that the Holy See’s commitment, despite needed improvements, is welcome and appreciated by its European neighbors.

Moneyval’s progress report said that, despite some things that need to be fixed, the Holy See’s commitment to financial transparency, started under Benedict XVI, meets international standards, despite the unique reality of the Vatican City State and Holy See’s mission.

For the Vatican, finances are just a tool to carry out the mission of evangelization, and not an end in themselves.

Port Authority explosion suspect: What we know about Akayed Ullah

By Kaitlyn Schallhorn

An attempted suicide bomber who set off a rush-hour explosion at the nation’s busiest bus terminal is a Bangladeshi national living in Brooklyn who was inspired by ISIS, law enforcement officials said.

The suspect in Monday morning’s blast at Port Authority in midtown Manhattan was identified as Akayed Ullah, 27. Ullah strapped a pipe bomb to his body with Velcro and zip ties, and it detonated in a subway corridor, police said.

What do we know about the suspect?

Ullah lived in Brooklyn, but he immigrated from Bangladesh nearly seven years ago, federal law enforcement sources confirmed to Fox News. A person briefed on the probe said Ullah came to the U.S. on an F-4 visa, a preferential visa available for those with family in the U.S. who are citizens.

Law enforcement officials said Ullah was inspired by ISIS but didn’t appear to have direct contact with the group and likely acted alone.

Ullah was a licensed cab driver from March 2012 to March 2015, the New York City Taxi and Limousine Commission confirmed to Fox News. His TLC For-Hire Vehicle Driver’s License was not renewed after 2015.

The TLC spokesperson did not confirm “whether he drove for any particular base, or whether he simply got the license but didn’t drive at all.” He did say Ullah was not licensed to drive a yellow taxi.

An Uber spokeswoman confirmed to Fox News that the ride-sharing company has no record of Ullah being “connected to the Uber platform.” Lyft also does not “have any records” that Ullah worked for it, a spokesperson told Fox News.

What else do we know about the attack?

The suspect allegedly packed a 5-inch metal pipe bomb and battery pack into the right side of his jacket, according to The New York Post. Ullah told police he made the bomb at his work, law enforcement sources told Fox News.

The Post reported that he worked for an electrical company.

The device was an “effectively low-tech device,” New York Gov. Andrew Cuomo said Monday. Officials said they are investigating whether the suspect detonated the bomb intentionally or if it went off prematurely.

The explosion occurred just before 7:30 a.m. near 42nd Street between Seventh and Eighth avenues, law enforcement officials said. The explosion triggered a massive emergency response by police and fire both above and below ground, tangling subway and bus service at Port Authority.

The device was an “effectively low-tech device,” New York Gov. Andrew Cuomo said Monday. Officials said they are investigating whether the suspect detonated the bomb intentionally or if it went off prematurely.

The explosion occurred just before 7:30 a.m. near 42nd Street between Seventh and Eighth avenues, law enforcement officials said. The explosion triggered a massive emergency response by police and fire both above and below ground, tangling subway and bus service at Port Authority.

Fox News’ Jake Gibson, Rick Leventhal and The Associated Press contributed to this report.

Borders and Customs: Do You Need to Declare Your Crypto?

When arriving in the United States – and most other countries – customs officials often ask that travelers fill out a form to declare various items. Most of this is to try and catch various contraband items, unapproved foods, and exotic (dangerous to native ecosystems) animals from entering the country. However, these forms also ask about carrying certain amounts of money. This begs the question: if you have a mobile client or a hardware wallet, do you need to claim it? What if you simply memorized your private keys? Wouldn’t this just be treated like a debit card? 


Many travelers have already had to fill these forms out. In the United States, Customs asks if travelers are carrying more than US$10,000 or its equivalent on them in cash. This is largely to prevent money-laundering and other nefarious activity.

But those who have more than ten grand in their bank accounts need not claim their debit cards on these customs forms. Wouldn’t the same apply to having over US$10,000 in cryptocurrency on a mobile wallet, hardware wallet, or in an account for which the individual has memorized his or her seed phrase or private keys?

Probably not, I would argue. Bank accounts are exempt because these can be controlled and frozen. Essentially, having money in a bank means the account holder has given up control of that money; they’ve given over custodianship of these funds to a third party. While the third party should be beholden to its customer, there is always the possibility that it won’t keep the customer in mind. The money stays in the bank, and the account holder requests that they be granted access to their money when using their debit card or withdrawing cash.

Cash, or money over which an individual has full control is really what’s being targeted here. Crypto acts similarly to cash (but is far more secure) in that whoever holds the ability to spend it is the one who owns it. So it is likely that in the future we will see customs require individuals to claim their cryptocurrency holdings, including those that are stored in mobile or hardware wallets, as well as those for which individuals memorize the associated private keys.

I know what many of you are thinking, because was thinking it too: “What if I just don’t tell them?” It would be hard for them to follow up, and most customs agents have no idea what cryptocurrency is. Wouldn’t it be too much of a hassle to explain that knowing a phrase or an app on a phone can have access to funds which may be worth  more than $10K? Perhaps, but it’s about to get way worse if one were to withhold that information.

S.1241, also known as the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017, might – among other things – make withholding information about one’s cryptocurrency holdings a felony.

The 2018 World Cup will only shed more light on corruption in Russia

By: Murad Hemmadi

Scandals have dominated the lead-up to the big event, and there’s little chance of the tournament itself going smoothly

At about 6 p.m. local time on June 14 at Moscow’s Luzhniki Stadium, with Vladimir Putin in attendance and hundreds of millions tuning in around the world, a player will tap the ball to a teammate and kick off the 2018 FIFA World Cup. However the Russian team fares at home, the tournament will likely go down as a bad play by the ruling regime.

Nations treat the hosting of mega sporting events as a marker of “entering the global community [and] being a global player in terms of trade and economics,” says Simon Darnell, an assistant professor at the University of Toronto. They’re looking to be recognized as “a country with international prestige, a leader, forward-looking.” The Putin regime must see the World Cup as a chance to showcase Russia’s resurgence. Instead, reputation-dinging scandals have dominated the lead-up, and there’s little chance of the tournament itself going smoothly.

There’s already the cost: a projected $13.8 billion in government spending. The total expenditure won’t be totted up until well after the tournament, but the 2014 Winter Olympics in Sochi cost four times as much as initially anticipated. The other side of the balance sheet is in bad shape, too—while the World Cup has traditionally been a commercial bonanza, FIFA has reportedly struggled to sign up large sponsors for 2018.

Meanwhile, European media outlets reported last summer that poorly paid and ill-treated North Korean labourers had been involved in building St. Petersburg’s Zenit Arena; according to a trade union, eight workers have perished on the site, among 17 killed at tournament venues in total.

The hosts have hardly been winning good press in other areas, either. Canadian lawyer Richard McLaren’s independent investigation for the World Anti-Doping Agency found an “institutional conspiracy” to cover up the use of performance-enhancing drugs by Russian Olympic and Paralympic athletes. As a result, the Russian team was banned in early December from competing at the 2018 Winter Games in Pyeongchang, South Korea.

Russian officials have vehemently denied these reports. But staging the World Cup is unlikely to illuminate Russia’s renewed relevance. Instead, it will shine the spotlight on a spectacular mess.



The term “money mule” is commonly seen and heard throughout the financial services sector, specifically in recent years as financial institutions and federal regulators alike have aimed to halt the seemingly endless trend that is money laundering. A money mule is defined as a person who transfers money acquired illegally in person, through a courier service, or electronically, on behalf of others. These individuals have become a significant tool for criminals to use in the process of cashing out on their potentially compromised bank accounts. In the past, these schemes have targeted unknowing participants with personal and/or financial issues, offering them seemingly legitimate employment opportunities for distinguished positions such as “money transfer agent” or “payment processing agent.” Another common strategy has been the work-from-home (WFH) schemes, which have been “used by fraudsters and mule herders to entice witting or unwitting individuals into providing bank account details for the purpose of receiving an Automated Clearing House (ACH) deposit or counterfeit check. They are then instructed to electronically transfer funds to a third party, often in another country”, through money-service businesses in the form of wire transfers (Charles, 2017). These often utilize job search websites, social networking sites, and automated emails, where WFH offers are disguised to appear as a job opportunity from a legitimate company. In many cases these schemes can be difficult to detect, especially when widely-recognized trademarks and logos are used to help create the illusion of legitimacy. While each of these stunts has had success in their own right in years past, the international public has in large part grown wary of the typical means by which financial criminals have targeted potential mules in the past. However, criminals have turned to a new, more sustainable method that has already seen great success in 2017, and could continue to grow in the years to come.

The money mule trend has re-emerged as a hot-button issue today, as new reports from prominent global law enforcement agencies have shown that children and young-adults have now become the primary targets of criminals looking to move their dirty money. The article “New data reveals stark increase in young people acting as ‘money mules’”, cited in BSA News Now on November 28th, discusses recently released data from the United Kingdom’s fraud prevention service, Cifas, tying the growth of bank account misuse to younger populations. According to the report, there has been a “75 per cent rise in the misuse of bank accounts by 18 to 24 year olds in the past year, with 8,652 cases seen between January and September 2017” as compared to the same period in 2016 (WBWire, 2017). The most common trend in the misuse pattern has seen these youths acting as the aforementioned “money mules” – allowing their bank account(s) to be used to facilitate the movement of illicit funds. Experts believe that this latest development has capitalized on young and relatively naïve individuals, including students, who often have little to no cash flow.

Cifas, working alongside Financial Fraud Action UK (FFA UK), has begun a campaign titled “Don’t Be Fooled” to both educate and discourage younger generations from engaging in activity of this nature. One of the tactics most commonly employed by criminals to exploit this specific demographic is similar to those that were previously discussed. In these new cases, criminals approach students and young-adults with “what looks like a genuine job offer, asking them to receive money into their bank account and transfer it onto someone else, while keeping some of the cash for themselves” (WBWire, 2017). This offer seems like easy money for unknowing youths, requiring them to do little more than visit their local money transfer agency or perform a few clicks of a mouse. However, the repercussions of this activity can be severe, and can impact the futures of the individuals involved for years to come.

Statistics have also shown that money mule fraud has increased profoundly over the past five years alone, as cases involving 18-24 year olds have nearly tripled since 2013. This trend represents a significant threat to the general public in the areas where these tactics are being used, as the proceeds of this form of financial crime are often used in drug and human trafficking, large-scale money laundering and terror financing. One of the key points Cifas and FFA UK have made in their attempts to deter youths from engaging in this activity through their campaign is informing them that if they act as money mules, either wittingly or unwittingly, they are essentially involved in money laundering, albeit often at a small scale. They have also made sure to highlight the fact that it is very likely that this activity will be discovered given the wealth of new, sophisticated regulatory technologies continuing to emerge throughout the financial sector. If unearthed, their financial accounts will undoubtedly be closed, sending them in a downward spiral where they will likely face difficulties in opening accounts elsewhere, while also potentially impacting their ability to “obtain student loans, mobile phone contracts or other financial products” (WBWire, 2017). The groups have also made sure to touch on the most frightening reality involved with being a money mule – that is, a person convicted of money laundering could face up to 14 years in prison.

While the opportunity for a quick and easy payout can be enticing for individuals of any age, the repercussions of such activity could be catastrophic. As part of the “Don’t Be Fooled” campaign, Cifas and FFA UK have published a list of ways to avoid becoming a money mule. The 5 simple steps go as follows:

  • Do not give bank details to anyone you do not know or trust
  • Be wary of job offers where all interactions and transactions are done online
  • Be cautious of unsolicited offers of easy money
  • Research any company that makes you a job offer
  • Be wary of job offers written in poor English with grammatical errors or spelling mistakes






The European law enforcement agency Europol recently had a successful crackdown on the “money mules” discussed in this week’s feature article. Europol reportedly “uncovered $36 million in illicit money transfers and made 159 arrests in less than a week” over the week of Thanksgiving, and found that “Around 90 percent of 1,719 illegal transactions identified during the short campaign were linked to cyber crime, with cryptocurrencies like Bitcoin playing an increasing role in money laundering schemes” (Rumney, 2017). The latest campaign is the third relatively recent effort by law enforcement agencies and banks to combat mule operations and money laundering in Europe, with these entities now beginning to target the organizers and recruiters of these ploys, making their efforts much more effective.

The overall number of money mule cases in Britain increased by nearly 50% overall between 2016 and 2017, making the need for group coordination and cross-border cooperation to hinder this activity vital for the well-being of the financial industry in Europe and across the globe. That collaboration was evident in this latest effort, as “law enforcement agencies from 26 countries spanning the European Union, eastern Europe and the United States participated in the Nov. 20-24 campaign, along with 257 banks and private-sector partners, Europol, judicial cooperation agency Eurojust and the European Banking Federation” (Rumney, 2017).




An under-the-radar program undertaken during the presidency of Barack Obama re-emerged on the national stage recently, as the U.S. Department of Justice (DOJ) recently announced its plans to continue its enhancement of international cooperation and financial security. Enacted in early-2016, this program was designed to “encourage companies to voluntarily disclose paying bribes to foreign officials”, and swore to reduce penalties to both domestic and foreign companies that disclose information of this variety and cooperate with the Justice Department. Earlier this week Deputy Attorney General Rod Rosenstein proclaimed that a revised version of the policy will be incorporated to make the legislation permanent, making the program yet another potent tool in the global fight against corporate crime.

The goal of the program is to aid in the enforcement of the Foreign Corrupt Practices Act (FCPA), which made it unlawful for certain individuals/entities to make payments to foreign government officials to assist in obtaining or retaining business. The incentive-based system has promised companies listed on U.S. stock exchanges the chance to receive a 50% reduction in fines if they meet the current self-disclosure guidelines for reporting. Enforcement of the FCPA is likely to receive a significant boost following the announcement, although the program has already  been rather successful. The DOJ has indicated that “Since 2016, they have “obtained criminal resolutions in 17 corporate-related FCPA cases, resulting in penalties and forfeitures of $1.6 billion” (Farivar, 2017).




Unhappy with the recent string of scandals and crime seen across the Australian banking sector, Australia’s Prime Minister Malcolm Turnbull has called for a “wide-ranging” public inquiry to address the growing issue. In a formal address on the topic, Turnbull stated “the yearlong royal commission will examine the conduct of the nation’s banks, insurers, financial services providers and pension funds, and consider whether regulators have enough power to tackle misconduct” (Scott & Cadman, 2017). Although several of the country’s major banks had opposed an inquiry of this nature – due in large part to the potential ramifications that could ensue given the potential downturn of investor confidence – the banks eventually gave in in order to keep Australia’s sterling reputation as one of the world’s top financial systems intact.

Australia has been riddled with cases of AML law breaches and other improper financial activity in recent years. In fact, Australia’s four largest banks –  Commonwealth Bank of Australia, Australia & New Zealand Banking Group Ltd., Westpac Banking Corp. and National Australia Bank Ltd – which are “responsible for 80 percent of the nation’s loans, have been hit by allegations they gave poor financial advice, failed to honor insurance claims, mistreated small business owners and that some attempted to manipulate benchmark interest rates” (Scott & Cadman, 2017). Although he had been criticized for his over-tolerance in regards to these rather serious issues, Turnbull hopes his latest efforts will further ensure that Australia’s “financial system is working efficiently and effectively” (Scott & Cadman, 2017).

The UK and EU Plan to Make Bitcoin Investors Use Their Real Names

By: Rhett Jones

Bitcoin managed to set a new price record on Sunday, briefly hitting $11,826per coin. And governments around the world are taking note of the boom in divergent ways. In the European Union, a new plan is expected to regulate cryptocurrencies under the same anti-money laundering laws as fiat money. It’s expected to take effect sometime next year.

For governments that are suspicious of cryptocurrencies, fears of bubbles, ponzi schemes, and economic destabilization have often been the focus. Countries like South Korea and China have publicly come out against initial coin offerings (ICOs) that work as investment opportunities and have a high potential for fraud. But for the UK and the EU, cryptocurrencies’ potential for enabling money laundering, drug dealing, terrorist funding, and other nefarious activities have lawmakers up in arms. According to The Guardian:

[Britain’s] Treasury plans to regulate bitcoin and other cryptocurrencies to bring them in line with anti-money laundering and counter-terrorism financial legislation. Traders will be forced to disclose their identities, ending the anonymity that has made the currency attractive for drug dealing and other illegal activities.

Under the EU-wide plan, online platforms where bitcoins are traded will be required to carry out due diligence on customers and report suspicious transactions.

Last week, London’s Metropolitan Police publicly warned that drug dealers at all levels were using Bitcoin ATMs to stash their profits out of sight.

 In October, Stephen Barclay, the economic secretary to the Treasury in the UK, responded to a parliamentary inquiry with a written plan that would amend anti-money laundering and counter-terrorism regulations to include cryptocurrencies. “The government supports the intention behind these amendments, he wrote. “We expect these negotiations to conclude at EU level in late 2017 or early 2018.”

How seriously these bodies pursue individual cryptocurrency users remains to be seen. It would certainly cause headaches for Bitcoin and alt-coin users because anonymity is one of the most attractive features of cryptocurrency. But the fact is, with Bitcoin and variations like Monero, if a user wants to be anonymous, there’s little that a government can do to stop them. Regulating exchanges will be easier, but if someone wants to bypass an exchange, they could certainly do so. Still, criminalizing the use of cryptocurrencies without attaching identification would certainly be a deterrent, and individuals who don’t take every step to hide their identity could be targeted.

Last week, White House Press Secretary Sarah Huckabee Sanders said that Tom Bossert and the Homeland Security team was “monitoring” cryptocurrencies. It’s unclear whether the US considers Bitcoin to be a security issue, or if the White House was just improvising an answer to a question it hadn’t really considered.

But not all governments are taking the view that cryptocurrencies are a threat.

For Venezuela, they could be an opportunity to find relief from the economic struggle that was only exacerbated by recent sanctions. According to Reuters, Venezuela’s President Nicolas Maduro announced on Sunday that his government would issue its own digital currency called the “Petro.”

 It’s a fitting name because the Petro will be backed by oil, gas, gold and diamond reserves, Maduro said in a television broadcast. While it makes sense that Venezuela would try a drastic economic measure at a time when its monthly minimum wage has fallen to just $4.30, it’s not yet clear how the Petro would actually work. Bitcoin and its imitators are decentralized currencies that mostly use algorithms and public interest to determine their supply and value. Maduro didn’t offer many specifics, mostly making vague proclamations like saying that this initiative will help Venezuela “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”

For cryptocurrency evangelists, decentralized money has always been considered a potential option in countries where the people can’t trust their government to properly manage the economy. One could imagine, in theory, that an anonymous currency could help citizens get around economic sanctions and avoid the rapidly depreciating Venezuelan bolivar. But it appears that the Petro will simply be tied into Venezuela’s central bank, an untried strategy for a major country.

On top of that, The Washington Post reports that a third of Venezuela’s citizens don’t have an internet connection. Throw in the fact that digital currency has a bit of a learning curve, and that there’s no infrastructure set up for taking payments, and the plan seems at least a little bit half-baked. Angel Alvarado, an opposition lawmaker and economist, told Reuters that the move has no credibility. “It’s Maduro being a clown,” he said.

 Speaking of clowns, Mark Zuckerberg’s former rivals the Winklevoss twins recently became Bitcoin billionaires, according to The Telegraph, as their combined $11 million investment in the cryptocurrency in 2013 is now worth 10 digits. The last thing the world needs is more dimwitted billionaires. Maybe making this all illegal isn’t such a bad idea.

Crackdown On Bitcoin In UK Over Money Laundering, Tax Evasion

The Treasury of the UK has announced plans to strongly regulate the transfer of cryptocurrencieswith a view to cracking down on money laundering and tax evasion. The regulations have not been stipulated with specificity, but will certainly include anti-money laundering (AML) and know your customer (KYC) details.

The regulation is intended to take force before the end of 2017, or just at the beginning of 2018. The increased regulations, in line with the directives in the EU, are intended to limit the amount of anonymity possible for cryptocurrency traders. According to John Mann, one of the Treasury committee:

“These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get left behind – that’s particularly important in terms of money-laundering, terrorism or pure theft. I’m not convinced that the regulatory authorities are keeping up to speed. I would be surprised if the committee doesn’t have an inquiry next year. It would be timely to have a proper look at what this means. It may be that we want to speed up our use of these kinds of thing in this country, but that makes it all the more important that we don’t have a regulatory lag.”

Other regulations

Other regulations have been threatened around the world, as Bitcoin price soars. With adoption exploding, and massive influx of institutional capital via futures and other contracts, Bitcoin is becoming far more of a financial reality that it has ever been before. China, Russia, and other countries have made it clear that the digital currency will be off-limits, while other countries like Switzerland and Malta are seemingly far more open.

ICE Agent: Cryptocurrencies Increasingly Used in Money Laundering

By: Nikhilesh De

Criminal organizations are increasingly using cryptocurrencies to launder money or otherwise pay for illicit activities, according to one U.S. Immigration and Customs Enforcement agent.

Child exploiters, drug smugglers, illegal firearm sellers and intellectual property rights violators are all beginning to use cryptocurrencies for their transactions, said Matthew Allen, ICE’s special agent in charge of Homeland Security Investigations (HSI).

Allen testified to the Senate Judiciary Committee on modernizing anti-money-laundering laws to limit both laundering and terrorist financing on Nov. 28, explaining that virtual currencies are the newest major method for hiding criminal proceeds.

In his testimony, he said:

“HSI agents are increasingly encountering virtual currency, including more recent, anonymity enhancing cryptocurrencies (AECs), in the course of their investigations. AECs are designed to better obfuscate transaction information and are increasingly preferred by [transnational criminal organizations].”

Some exchanges are beginning to design services specifically to thwart tracking by use of mixers that anonymize virtual currency addresses, making it even more difficult to determine which user conducted a particular transaction, Allen said.

Drug arrests

The department has had some success in identifying criminals who use bitcoin, however. Allen pointed to the November 2016 arrest of Utah resident Aaron Shamo, who allegedly ran a Xanax and fentanyl manufacturer group.

Shamo allegedly took his profits in bitcoin, and HSI seized approximately $2.5 million from him at the time.

Another alleged fentanyl vendor, Pennsylvanian Henry Koffie, was arrested this past July and had $154,000 seized. Allen said Koffie sold nearly 8,000 orders of the drug, “most of it paid for with bitcoin.”

Turkish gold trader details money laundering scheme for Iran

Brendan Pierson

NEW YORK (Reuters) – A Turkish-Iranian gold trader described in a U.S. court on Wednesday how he ran a sprawling international money laundering scheme aimed at helping Iran get around U.S. sanctions and spend its oil and gas revenues abroad.

Reza Zarrab, who has pleaded guilty and is cooperating with U.S. prosecutors in the criminal trial of a Turkish bank executive, told jurors in federal court in Manhattan that he helped Iran use funds deposited in Turkey’s state-owned Halkbank to buy gold, which was smuggled to Dubai and sold for cash.

The testimony, given through Turkish interpreters, came on the second day of the trial of Halkbank executive Mehmet Hakan Atilla, who has pleaded not guilty.

U.S. prosecutors have charged nine people in the case, although only Zarrab, 34, and Atilla, 47, have been arrested by U.S. authorities. Prosecutors have said the defendants took part in a scheme that involved gold trades and fake purchases of food to give Iran access to international markets, violating U.S. sanctions.

The case has fueled tensions between the United States and Turkey, which are NATO allies. Turkish President Tayyip Erdogan’s government has said the case was fabricated for political reasons.

Standing before the jury in tan prison garb on Wednesday, Zarrab drew a multicolored diagram to illustrate the complex series of transactions he said he used to avoid scrutiny of U.S. banks and regulators. He explained how he falsified customs documents to make it appear that gold was bound for Iran, rather than Dubai.

Zarrab said Atilla was “the most knowledgeable person about the sanction rules” at Halkbank, and that he helped develop the scheme. He said Atilla and Halkbank’s then-general manager, Suleyman Aslan, instructed him how to carry it out.

“He made sure that the system and method worked,” Zarrab said of Atilla.

Zarrab said he began working with Halkbank on the scheme in 2012, after bribing Zafer Caglayan, then Turkey’s economy minister, to broker a deal with Aslan. He said Aslan had initially refused to work with Zarrab because he was too well known.

Zarrab said he paid Caglayan bribes amounting to more than $50 million.

Caglayan and Suleyman have also both been charged in the case. Turkey’s government has previously said that Caglayan acted within Turkish and international law. Halkbank has said that all of its transactions fully complied with national and international regulations.

Zarrab testified that before working with Halkbank, he handled Iranian transactions through Turkey’s Aktif Bank. He said the bank initially refused to let him open an account, but relented after Zarrab asked Egemen Bagis, then Turkey’s minister of European Union affairs, for help.

 Zarrab said Bagis set up a meeting between him and Aktif Bank’s general manager and that he was then allowed to open an account. However, Aktif Bank later shut down the account after receiving a warning from the United States, Zarrab said.

Reuters was not immediately able to reach anyone at Aktif Bank for comment after working hours on Wednesday.

Zarrab is expected to continue testifying on Thursday.

Government to set up forum to combat money-laundering and financing of terrorism

 An agreement to set up an inter-departmental forum to combat money-laundering and the financing of terrorism has been reached between Finance Minister Malusi Gigaba and Justice Minister Michael Masutha.

It would replace the Counter Money-Laundering Advisory Council (CMLAC) and would aim to improve the quality of consultation for the implementation of the Financial Intelligence Centre Act.

 Gigaba said in a written reply to a parliamentary question by DA finance spokesperson David Maynier that the mandate of the forum or committee “would be to promote discussion, collaboration and co-ordination between the relevant law-enforcement agencies, government departments and regulatory authorities to ensure the South African authorities are more effective in implementing both the spirit and letter of the complete legal framework against money-laundering and terrorist financing.”
He added that “a consultative structure to facilitate engagements with accountable institutions in the private sector is also being established, with a banking sector anti-money laundering and combating the financing of terrorism steering committee already having been established”.

Gigaba said Treasury had published a consultation document to get public comments on these new consultation mechanisms. “We will monitor how well these consultation forums work over the next year or two and, thereafter, make a decision on how best to formalise the consultation forums.”

“We want to deepen and improve our consultative mechanisms to strengthen implementation,” he said. “The CMLAC played a significant role in the drafting of the initial regulations of the Financial Intelligence Centre Act when it was first enacted in 2003, but was not as effective as a forum for implementation.”