By Tara John
CNN- The term “money laundering” was never more appropriate than this week, when Dutch police found around $400,000 stuffed inside the drum of a washing machine.
By Tara John
CNN- The term “money laundering” was never more appropriate than this week, when Dutch police found around $400,000 stuffed inside the drum of a washing machine.
By Luc Cohen
(Reuters) – The U.S. Justice Department has accused a Venezuelan television mogul of bribing officials in the South American country and helping them launder the funds through assets in the United States, according to charges made public this week.
Raul Gorrin, owner of Venezuelan television channel Globovision and insurance firm Seguros La Vitalicia, was charged in an indictment unsealed on Monday in federal court in West Palm Beach, Florida, with violating U.S. anti-corruption laws in efforts to win contracts to carry out currency exchange operations for the government.
The indictment was filed under seal in August after prosecutors said it was necessary to protect the “integrity of the ongoing investigation.”
Gorrin was declared a fugitive in September, and the charges were unsealed on Monday after prosecutors said it would help law enforcement arrest him, court records showed.
Venezuela’s exchange controls, created under late President Hugo Chavez, have for 15 years sold heavily subsidized dollars through state currency agencies or government auctions.
The mechanism has been one of the principal forms of illicit enrichment under the ruling Socialist Party. U.S. federal prosecutors over the last year have issued a string of indictments of Venezuelan officials for using the U.S. financial system to launder the proceeds of those operations.
According to the indictment, between 2008 and 2017, Gorrin facilitated more than $150 million in bribe payments to multiple officials in Venezuela’s treasury for the right to participate in the currency deals. Much of the money was wired from Swiss bank accounts to accounts in Florida, prosecutors said.
Gorrin, 49, allegedly also bought officials jets, yachts, “champion horses” and luxury watches in Florida and Texas.
Globovision overhauled coverage and softened criticism of Chavez’s successor, Nicolas Maduro, after Gorrin purchased the channel in 2013, reporters said at the time.
Neither Globovision nor La Vitalicia responded to requests for comment. Gorrin’s defense attorney, Howard Srebnick, did not immediately respond to a request for comment.
Gorrin’s whereabouts were not immediately clear. He faces a maximum penalty of 45 years in prison if found guilty.
In a separate case last month, a former finance executive at Venezuela’s state-run oil company PDVSA pled guilty to taking bribes and attempting to launder $12 million of the illicit payments, the U.S. Attorney’s Office for the Southern district of Florida said.
By Rachel Thomas
BATON ROUGE, LA (WAFB) – A Baton Rouge man has been indicted by a federal grand jury for allegedly aiding and abetting a conspiracy to distribute drugs, international money laundering, and other charges related to these activities.
Donovan Barker, 59, made his initial court appearance on October 25 and pleaded not guilty.
According to the indictment, Barker owned and operated several businesses (Quantum Information Technologies, Caring Partners 1, llc, Don Western Sky, llc, Life Positive Services, llc, and Healthy Life 1, llc.), which sold and distributed green tea extracts and herbal supplements, but was actually working with others to import schedule IV drugs into the U.S. in order to repackage and distribute those drugs to people who had purchased them online. Barker was also reportedly accepting payments from these buyers and transmitting money to others operating outside the country.
The Department of Justice says from October of 2012 to February of 2016, Barker received more than $4.6 million in payments from people all over the country who had bought drugs and other substances online. Barker reportedly wired a majority of the money to various foreign bank accounts in the Philippines, India, China, and Canada. Barker is alleged to have been operating a money transmitting business without the proper license and without complying with applicable federal registration requirements.
The indictment also alleges that on May 24, 2016, Barker knowingly and intentionally possessed tramadol, a controlled dangerous substance.
“This indictment demonstrates the lengths to which international drug traffickers will go to deliver drugs and the efforts my office will make to stop them. We are committed to eliminating the international financial network used by drug dealers to bring drugs to our country and launder their illegal proceeds. I want to thank our prosecutors and our federal, state, and local partners for their extraordinary efforts in this case,” said U.S. Attorney Brandon Fremin.
Barker is indicted on charges of aiding and abetting a conspiracy to distribute tramadol and carisoprodol, international money laundering, unlawful money transmitting, and possession of tramadol.
By Aaron Arnold
At its October meeting, the Financial Action Task Force—an intergovernmental body that promotes international anti-money laundering and counter-terrorism financing standards—decided that it will not call on its members to apply countermeasures against Iran. (In the world of such intergovernmental bodies, the word “countermeasures” has a very specific meaning: taking action to block Iran. Meanwhile, “measures” merely refers to enhanced scrutiny.) But the organization did say that countries should tightly watch over Iranian transactions even if not going so far as to terminate certain types of banking networks with Iran.
Why is this distinction important? Because in essence, the organization’s decision gives Iran an additional four months to enact anti-money laundering reforms that are in line with international standards—and gives the European Union that much more political wiggle room in its effort to try to salvage the nuclear deal with Iran.
The tortured history of anti-money laundering reforms in Iran. Such reforms are crucial if Iran is to get relief from sanctions. Although enacting new, anti-money laundering legislation is not a condition of the Joint Comprehensive Plan of Action—the agreement between Iran and the P5+1 (the United States, United Kingdom, France, Russia, China, and Germany) that curbed Iran’s nuclear program in exchange for sanctions relief—doing so is necessary for Iran to reintegrate into the global financial system. Foreign investment in Iran, for example, would be stymied if banks perceived the country’s financial system to be high-risk. This is why the Financial Action Task Force’s original decision, back in June 2016, to suspend countermeasures against Iran was so consequential: The decision provided the political space necessary for Iran to begin implementing new anti-money laundering rules and regulations. At least, that was the plan.
That plan changed in May this year, when the Trump administration decided to unilaterally withdraw from the Iran deal and reimpose US financial and economic sanctions. The US Treasury Department gave companies two separate 90-day and 180-day deadlines to end ties with Iran, otherwise known as “wind-down periods.” This week marks the end of the final wind-down period, whereby the United States reimposes sanctions on Iran’s financial, energy, shipping, and insurance sectors. Remarks by US Treasury Secretary Mnuchin suggest that the United States is even prepared to sanction SWIFT—the Belgium-based financial messaging service that handles the bulk of global transactions—if the company does not disconnect Iranian banks from its services. A move like that would not only intensify the dour state of relations with the European Union, but potentially invite significant blow-back against US banks.
In June 2016, Iran committed to implementing an action plan addressing its money-laundering and counter-terrorist financing deficiencies. Although Iran has since moved several reform efforts forward, they still fall short of international standards. Specifically, the Financial Action Task Force noted that Iran had failed to adequately address nine out of ten commitments from the country’s action plan. For example, Iran’s counter-terrorist financing legislation includes exemptions for groups “attempting to end foreign occupation, colonialism, and racism”—a rather glaring loophole. Iran also still lacks appropriate mechanisms and authorities to identify and freeze terrorist-linked assets in line with relevant UN resolutions. And it lacks rules and regulations to ensure adequate customer due diligence requirements. These are just a few of the many places where Iran has failed to measure up to international standards in this area—in some cases, for as long as a decade.
Since 2008 the country has made overtures to join the Financial Action Task Force, and promised to adopt a range of anti-money laundering and counter-terrorist financing reforms. But each year it has fallen short of making any meaningful progress.
Most recently, Iran’s President Hassan Rouhani and his supporters have called for new rules and regulations that would put Iran on track with international standards. Ayatollah Khamenei and hard liners, on the other hand, have expressed opposition to the Financial Action Task Force’s standards, citing concerns that the reforms were instruments of the West. (To be fair, it took Pakistan more than four years to come into compliance with FATF standards after committing to an action plan.)
By February 2019, the Financial Action Task Force expects Iran to implement all of its commitments or else the task force will “take further steps to protect against the risks emanating from deficiencies in Iran’s AML/CFT regime.” Whether this means a recommendation that countries take countermeasures against Iran or perhaps another delay is entirely up to Iran.
Is Iran getting a pass? Since May, EU leaders have been scrambling to keep the Iran nuclear deal intact. Leading proposals include establishing a “special purpose vehicle,” which would essentially act as an intermediary between EU businesses and Iran that would help transactions avoid US sanctions.
In other words, this means the establishment of an alternative payment system that avoids the US financial system. Anticipating such a move, Secretary Mnuchin has already threatened to sanction the “special purpose vehicle” should EU companies use it to avoid US sanctions. For its part, in August, the European Council had tried to prepare for the effects of such a US move by updating its own “Blocking Statute,” which gives EU businesses a legal avenue to recoup damages from US secondary sanctions.
But it would be difficult (if not impossible) for European leaders to continue trying to salvage the JCPOA while also telling its banks that they must employ countermeasures against Iranian transactions as a result of the Financial Action Task Force’s designation of Iran as a “high risk and non-cooperative” jurisdiction.
Although it remains to be seen whether or not the Iran nuclear deal is salvageable, there are few incentives left for Iran to implement anti-money laundering reforms. For better or worse, the Financial Action Task Force and the future of the JCPOA have become politically intertwined as a consequence of US unilateral sanctions. On one hand, the task force has given EU leaders the political latitude to push back against US sanctions—at least for the next four months, during which the European Union will not require its banks to take active countermeasures against Iran. On the other hand, the decision sends the wrong signal to the international community—that international norms and standards are taking a backseat to geopolitics.
By THOMAS KEAN | FRONTIER
YANGON — An assessment of Myanmar’s efforts to tackle money laundering and terrorist financing has found significant weaknesses, including a failure to recognise the “serious” money laundering risks that the country faces.
The Asia/Pacific Group on Money Laundering released the Mutual Evaluation Report on October 22, three months after it was adopted at the APG annual meeting in July.
The “poor results” on the evaluation mean Myanmar will automatically be reviewed by the International Co-operation Review Group of the Financial Action Task Force, and may be placed on a black or grey list following that review.
Myanmar was removed from the FATF’s list of high-risk and monitored jurisdictions in 2016 following some limited reforms.
The Mutual Evaluation Report found that despite Myanmar being exposed to “a large number of very significant” money laundering threats, the authorities did not demonstrate a “credible understanding” of the risks.
Myanmar needed to make “major improvements” in a range of areas, including investigation and prosecution of money laundering and terrorist financing, and confiscation of the proceeds of crime.
Money laundering investigations are “not prioritised” and typically occur only after the successful prosecution of a related offence, such as drug trafficking, in order to identify and confiscate assets, the report said. As a result, only a tiny proportion of overall proceeds of crime are confiscated, and investigations are not pursued beyond Myanmar’s borders.
Myanmar was also taken to task for its failure to pursue international cooperation, particularly in regard to money laundering, but the country fared somewhat better in regard to tackling terrorist financing.
The evaluation was based on information provided by Myanmar and gathered by an evaluation team during a visit to Myanmar in late 2017.
The APG is one of nine regional bodies that work with the FATF to combat money laundering, the financing of terrorism and the financing of the proliferation of weapons of mass destruction.
Myanmar spent more than a decade on an FATF blacklist for non-cooperative states until 2016. In June of that year it was removed due to the “significant progress” it had made in establishing the legal and regulatory framework to meet commitments regarding the strategic deficiencies identified by the FATF in February 2010, the organisation said.
The decision to remove Myanmar followed a brief field visit, the Myanmar Times reported at the time, but the Mutual Evaluation Report is a more rigorous assessment of whether the country is tackling money laundering and terrorist financing.
By Myanmar’s own estimate, proceeds of crime are likely to total around US$15 billion a year, or around 24 percent of GDP.
A national risk assessment drafted with International Monetary Fund support as part of the mutual evaluation process estimated that 63 percent of this figure was derived from tax and excise evasion, environmental crime, and corruption and bribery.
Almost 50 percent of proceeds were generated by activities carried out by transnational crime groups and another 35 percent by domestic organized crime, the assessment estimated. Between 30 and 40 percent of the proceeds of crime is believed to flow out of Myanmar each year, with China and Thailand thought to be the main destinations.
The national risk assessment acknowledged that law enforcement agencies were “not very effective” at conducting money laundering investigations, and were hampered not only by a lack of resources and training, but also a perception that officers could be bribed.
The Mutual Evaluation Report said Myanmar’s risk assessment appeared to “under-rate the significance of drug production and trafficking, as well as the role of corruption in predicate crimes and money laundering”. There was also no analysis of how proceeds of crime are laundered within Myanmar, it noted.
Of the 40 counter-measures against money laundering recommended by the Financial Action Task Force, Myanmar was deemed to be in compliance with only six, largely compliant with 10, partially compliant with 18 and non-compliant with six.
It was evaluated as non-compliant on a recommendation concerning money and value transfer services, largely due to the lack of regulation in relation to the informal remittance network known as hundi.
Similarly, Myanmar was deemed non-compliant on a recommendation concerning Designated Non-Financial Business or Professions, partly because of the operations of unlicensed casinos.
Jurisdictions that are deemed to have achieved “poor results” on the evaluation by meeting at least one of four criteria – for example, being non-compliant or partially compliant on 20 or more of the 40 recommendations – are automatically referred to the ICRG for review. Myanmar met three of four criteria for review.
If Myanmar is prioritised by the ICRG, it will have to agree on an action plan with the group requiring it to take actions to rectify deficiencies and report directly to the FATF on the progress made within a specified time frame. It may then be added to the FATF’s list of high-risk and other monitored jurisdictions, which presently includes only North Korea and Iran.
However, the 2018 Mutual Evaluation Report still represented a significant improvement on Myanmar’s last evaluation in 2008, when it was compliant or largely compliant on only four recommendations.
Among the steps that Myanmar has taken are the introduction of a revised money laundering offence in 2014 and a revised terrorist financing offence the following year. Organisational changes to a number of government bodies has led to “changes and some improvements”, the evaluation noted.
However, the Mutual Evaluation Report said most of the reforms undertaken to address money laundering and terrorist financing risks appeared to be “ad hoc” and aimed at being removed from the FATF black list rather than addressing identified money laundering risks.
SAN FRANCISCO — Over the last year, Charlie Shrem, a 28-year-old Bitcoin investor, has bought two Maseratis, two powerboats — one of them 32 feet long — and a $2 million house in Florida, along with smaller pieces of real estate.
In the world of cryptocurrencies, where millions can be made and lost in a day, that might not make Mr. Shrem stand out. But unlike most Bitcoin entrepreneurs, in 2016 Mr. Shrem got out of prison, where he spent a year after pleading guilty to illegally helping people turn dollars into Bitcoin to buy drugs online.
Mr. Shrem, who had been the chief executive of Bitinstant, one of the first prominent Bitcoin businesses in the United States, has said in recent interviews that he went to prison with almost no money.
So where did the money for the expensive toys come from? That’s what two former business partners want to know.
Cameron and Tyler Winklevoss, the twins who turned money from a settlement with Facebook’s Mark Zuckerberg into a Bitcoin fortune, said they suspected Mr. Shrem had actually been spending Bitcoin that he owed them since 2012, according to a lawsuit unsealed in federal court on Thursday. The Bitcoin would be worth around $32 million at current prices.
“Either Shrem has been incredibly lucky and successful since leaving prison, or — more likely — he ‘acquired’ his six properties, two Maseratis, two powerboats and other holdings with the appreciated value of the 5,000 Bitcoin he stole from” the Winklevoss twins in 2012, the lawsuit says.
The lawsuit could blossom into an even bigger problem for Mr. Shrem because an affidavit filed in court suggests that Mr. Shrem has also not paid the government $950,000 in restitution that he agreed to as part of his 2014 guilty plea.
Mr. Shrem’s lawyer, Brian Klein, said in a statement that the claims by the Winklevoss brothers were baseless. “The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of Bitcoins,” he said. “Nothing could be further from the truth. Charlie plans to vigorously defend himself and quickly clear his name.”.
The lawsuit from the twins threatens another reversal of fortune for Mr. Shrem, who went from being one of the earliest Bitcoin millionaires to being called Bitcoin’s “first felon.”
When he was arrested in 2014, Mr. Shrem was accused by federal authorities of using his company, Bitinstant, to knowingly sell Bitcoin to people who wanted it to buy drugs from the online black market, Silk Road.
Since his release in 2016, Mr. Shrem has said in numerous interviews that he recognizes his past mistakes and wants to cut a new and legal path. On the podcast “Love, Sex and Money,” Mr. Shrem said that in the first months out of prison, he worked as a dishwasher and didn’t look at his email.
Over the last year, though, Mr. Shrem, has already gotten involved with a number of troubled projects.
He was among the leaders of two efforts — one a cryptocurrency credit card and the other an initial coin offering — that had to give money back to investors after various partnerships that Mr. Shrem had promised fell through.
But those are likely to be mere headaches compared to what he could face in a confrontation with the Winklevoss twins. Mr. Shrem helped get the brothers interested in Bitcoin in 2012 and became their first adviser in the young industry.
A few months into this partnership, the twins said they realized that Mr. Shrem had not given them all the Bitcoin they were due. The brothers gave Mr. Shrem $250,000 in September 2012, but the lawsuit says that a month later, he only delivered around $189,000 worth of Bitcoin at the going price, which was around $12.50 at the time.
The 5,000 or so missing Bitcoins became a point of tension between the twins and Mr. Shrem. They asked him numerous times for an accounting of the Bitcoins he had purchased and eventually brought in an accountant who documented the missing funds, according to court documents.
“I have been patient and at this point, it’s getting a bit absurd,” Cameron Winklevoss wrote to Mr. Shrem in 2013 in an email quoted in the lawsuit. “I don’t take this lightly.”
The missing Bitcoin, which were worth 98 percent less at the time, appeared to have been forgotten in a broader battle between the brothers and Mr. Shrem over an investment in Bitinstant.
In 2013, Bitinstant fell apart and the twins blocked Mr. Shrem’s efforts to revive the company with new investors because of their concerns about his management style. By the time Mr. Shrem was arrested in 2014, as a result of activities at Bitinstant that took place before the brothers invested, they had cut off contact with him.
The Winklevoss twins’ problems with Mr. Shrem have not held them back. They were briefly each cryptocurrency billionaires last year, and they have built one of the leading cryptocurrency exchanges, Gemini. Despite this year’s big drop in cryptocurrency prices, their holdings are still worth nearly a billion dollars.
Cameron Winklevoss said that he and his brother decided to pursue the missing Bitcoins again after they saw Mr. Shrem’s recent spending patterns.
“When he purchased $4 million in real estate, two Maseratis, and two power boats, we decided it was time to get to the bottom of it,” Mr. Winklevoss told The New York Times.
The brothers hired an investigator, who found that 5,000 Bitcoins were transferred in 2013 through addresses associated with Mr. Shrem and onto the Bitcoin wallet services Xapo and Coinbase, according to the complaint. The investigator traced the money on the blockchain, the public ledger where all Bitcoin transactions are recorded.
Jed S. Rakoff, a judge in the Federal District Court for the Southern District of New York, approved an application the twins made in September to freeze any funds that Mr. Shrem holds with those companies. Judge Rakoff wrote in his order that Mr. Shrem had “evidenced an intent to frustrate the collection efforts of his creditors.”
The court fight could cause problems for Mr. Shrem’s latest venture, a firm called Crypto.IQ. The company, which promises market intelligence to Bitcoin traders, is holding a conference for customers in Las Vegas this month promising “unparalleled insights from a roster of experts at the very epicenter of the crypto universe.”
In an interview with Breaker magazine last month, Mr. Shrem said he was getting used to the ups and downs.
“My personal life goes through bull and bear markets, too,” he said. “So the key is how to deal with it when you’re in the bear markets.”
A professional football club or clubs are being investigated over allegations of money laundering, a minister has said.
Security minister Ben Wallace told the treasury select committee that the sports industry “is as susceptible as anything else” to being used to hide the source of dirty money.
The minister replied: “I know of (a) professional football club or clubs under investigation.
“I couldn’t reveal how many and what they are, for that is an operational matter.”
When he was pushed to give the number involved, Mr Wallace said: “There are live investigations that go on all the time and to expand any more could threaten investigations.
Mr Wallace told the MPs it can take years for investigations into money laundering to be finished.
“Not enough” had been reported by the football authorities, Mr Wallace told the committee.
A National Crime Agency spokeswoman said: “We do not routinely confirm or deny the existence of investigations.”
“We have not charged any professional football clubs with money laundering, and there are none currently in the court process.”
MapleChange, a Canada-based cryptocurrency exchange, recently announced that their platform was hacked. The exchange platform took to their Twitter handle to provide clarity on the situation, stating that they could not refund the stolen cryptocurrencies.
According to their official post, a bug on the platform enabled a group of hackers to withdraw funds remotely. The platform reported that 913 Bitcoins [BTC] were stolen and that they cannot refund any of the funds until a “thorough investigation” was conducted.
Another controversial aspect was that the “thorough investigation” resulted in the exchange platform realizing that they did not have funds for repaying its users. Furthermore, they stated that the platform would not function anymore and that they would soon deactivate their social media channels. Their official post stated:
“We have sustained a hack, and we are investigating the issue.”
On their official Twitter handle, the exchange stated that they had not “disappeared”, but had temporarily turned off their accounts to think of a solution.
In addition, they could not refund “everyone with all their funds”, but would soon open wallets in order to allow its users to “hopefully” withdraw whatever funds were left on the exchange. They added:
“We CANNOT refund any BTC or LTC funds unfortunately. We will try our best to refund everything else.”
Changpeng Zhao, the CEO of Binance, the world’s largest cryptocurrency exchange in terms of trading volume, was surprised by the hack and stated that a procedure was required to rank exchanges based on their wallet storage. He added that users had to avoid using exchange platforms which did not have anything in their cold wallets.
Maplechange’ed, a platform dedicated to find, take down and expose maplechange.com, with the help of members from the Lumeneo [LMO] telegram channel, allegedly found that Glad Poenaru, a service technician at American Piledriving Equipment, could have been responsible for the hack.
Joseph Young, a cryptocurrency investor and analyst, stated:
“A small crypto exchange pulled off an exit scam, taking all customer funds. There is no incentive for using small exchanges. Use established exchanges that are regulated, & transparent. Small exchanges also focus on maximizing profitability, not security or investor protection.”
MapleChange further added:
“We are sending all of the coin developers the wallets containing the coins we have left. So far, LMO and CCX have been handed over the funds.”
The UK is a haven for dirty money; more than £90 billion is estimated to be laundered through the country per year. The size of the UK’s financial and professional services sector, its open economy and the attractiveness of the London property market to overseas investors all make it unusually exposed to international money laundering risks. As part of new measures to tackle asset recovery and money laundering, the UK government introduced Unexplained Wealth Orders (UWOs) in January, which are being hailed as the cure to Britain’s dirty money problem.
What is an Unexplained Wealth Order?
UWOs require the owner of an asset worth more than £50,000 to explain how they were able to afford that asset. Introduced primarily to target Russian and Azerbaijan laundromats, UWOs have wide-ranging applications to all situations where the National Crime Agency (NCA) believes wealth was acquired illicitly, including tax evasion.
The game-changing nature of UWOs lies in the power they give UK law enforcement to prosecute. Formerly, little could be done to act on highly suspicious wealth unless there was a legal conviction in the country of origin. In cases where the origin country is in crisis or the individual holds power within a corrupt government, this is unlikely to be achieved. Where previously law enforcement agencies needed to prove in court that an asset was purchased with laundered funds, UWOs shift the burden of proof away from prosecutors and on to the asset’s owner.
Preventing Financial Crime with Unexplained Wealth Orders
The first successful use of a UWO since its implementation is the recent case of Zamira Hajiyeva, who owns millions of dollars in properties in London through offshore companies. Her husband, Jahangir Hajiyev, was convicted and sentenced to 15 years in prison for fraud and misappropriation of public funds, and authorities were able to identify a clear disparity between his income and the couple’s apparent wealth.
With corruption watchdog Transparency International estimating that £4 billion of UK property has been purchased with the proceeds of crime, it is hoped that this successful implementation of a UWO will herald a clampdown on overseas criminals laundering via the property market.
The success of this UWO has been fundamental in beginning to reduce the appeal of the UK as a destination for illicit income. In June, mortgage brokers were already reporting that Russian purchases of prime real estate in London had slowed as a result of both government pressure and a tightening of anti-money laundering rules.
There are, however, reasons to be wary of perceiving the introduction of UWOs as a cure-all for the UK’s money laundering problems. These court orders are ineffective as soon as a defendant can provide an explanation for the source of their wealth. In the absence of evidence to the contrary, they then win the argument. Legal difficulties and costs are other factors that can lead to delays in the UK’s fight against money laundering, while information obtained via a UWO cannot be used in criminal proceedings against the respondent. For UWOs to have credibility, authorities will need to ensure the first uses of them continue to be successful in order to serve as a useful deterrent going forward.
Further, money laundering covers a wide range of criminal activity and consequently can’t be solved by a single approach. Fragmented supervision and anonymous ownership of property in British Overseas Territories and Crown Dependencies are just two areas where Transparency International is still advocating for change to improve the UK’s asset recovery and anti-money laundering regime.
How Can We Continue to Fight Money Laundering?
It is clear that UWOs have the potential to act as powerful tools for law enforcement but are not yet being used frequently enough— more action is required if real change is to come. We need further action from the government to restrict property ownership and levy realistic local taxes.
With UWOs beginning to lead to the identification of criminals, questions will be asked of the financial institutions who facilitated the individual’s money management. To better equip themselves for the fight against money laundering, banks need to overhaul outdated AML systems to suit the complexity of the schemes perpetrated by criminals. They need to combat problems by employing entity resolution and network analysis techniques to understand vast data networks and identify hidden money.
Binance, the world’s largest crypto exchange, has voluntarily engaged in an initiative to eliminate money laundering on its platform.
For years, despite the inherent lack of privacy measures on major public blockchain networks like Bitcoin and Ethereum that discourage the settlement of illicit transactions, a widely pushed narrative against crypto has been the suspected usage of digital assets by criminals.
Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, and many other major cryptocurrencies are not anonymous by nature. With Know Your Customer (KYC) and Anti-Money Laundering (AML) systems integrated by cryptocurrency exchanges, it is extremely difficult for criminals to utilize digital assets to settle the transfer of illegal proceeds.
Authorities and government agencies across the globe are well aware of the non-anonymous characteristic of blockchains, which could have motivated governments like the US, Japan, and South Korea to legitimate and recognize the cryptocurrency market.
This week, Binance has started to cooperate with Chainalysis, a leading blockchain analysis company that evaluates suspicious transactions and addresses, to improve its AML system and to further legitimize the cryptocurrency sector.
“Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users. We expect many to follow Binance’s lead to build world-class AML compliance programs to satisfy regulators globally and build trust with major financial institutions,” said Jonathan Levin, co-founder and COO of Chainalysis.
In 2018, some of the world’s most influential banks were cracked down for money laundering. Danske Bank laundered $243 billion from criminal groups, and as CCN reported on October 20, Nordea Bank, the largest financial group in the Nordic countries, is said to have taken several illicit payments from banks in the Baltic region.
With the institutional market of cryptocurrencies growing exponentially, the tightening of AML systems employed by public exchanges is expected to solidify cryptocurrencies as a recognized asset class and the digital asset market as a well-regulated sector.
Wei Zhao, the CFO at Binance, said that maintaining the firm’s vision of increasing the freedom of money globally, the exchange will continue to adhere to regulatory mandates in the countries it operates in.
“By working with Chainalysis, we are able to continue building a foundational compliance program that enables the next phase of our growth. Our vision is to provide the infrastructure for a blockchain ecosystem and increase the freedom of money globally, while adhering to regulatory mandates in the countries we serve.”
The cryptocurrency sector is entering a new phase of development and growth, as Zhou explained.
During the 2017 bull market in which the valuation of the cryptocurrency market surged to $800 billion, the asset class obtained significant mainstream awareness in both countries that support crypto and regions that have established impractical regulatory frameworks to prevent local blockchain markets to flourish.
In a period in which governments are introducing increasing efforts to embrace crypto and blockchain businesses as a part of the fourth industrial revolution, voluntary initiatives by companies like Binance to legitimize the industry will ease the process of governments in regulating and acknowledging the global market.