AMLYZE’s Post

A few weeks ago I had the opportunity to sit down with Michael Heller at Dow Jones Risk & Compliance to talk about Crypto and Terrorist Financing. We covered a fair amount of ground, including 🔔 The importance of FATFs travel rule in establishing a paper trail for crypto transactions involving VASPs. 🔔 Crypto's role in terrorist financing and laundering. 🔔 Adoption of AML/CFT requirements in crypto regulation. The importance of off-chain data can not be overstated. When establishing a business relationship with a VASP, even if it's your counterparty, it's important to apply context by understanding a VASP and it's: ⚠ Geographic risk ⚠ Regulatory risk ⚠ Product risk 🔌 For further insights, follow VASPnet, and drop me a comment on your take on the subject. 🔌 #VASP #amlcft #travelrule https://lnkd.in/eQFbBWEN

South Africa Seeks to Enforce New Directive for Crypto Companies to Share Customer Identities In cross-border transfers, senders are required to furnish full names, comprehensive information regarding both the sending and receiving #crypto wallets and the beneficiary's name. However, for transactions below R5,000 ($271.18), verification of these details for accuracy is not mandatory. The proposal mandates that #CASPs must establish a risk-based policy for acquiring additional information on unhosted #wallets if they identify a heightened risk. Interested parties have until May 31 2024 to comment on the proposal below: https://lnkd.in/dQtaBBf4

🕊 The Isle of Man: A Clear Regulatory Path for Virtual Assets The Isle of Man is a well-known jurisdiction for businesses dealing with virtual assets, thanks to its clear and structured regulations. The Isle of Man Financial Services Authority (IOMFSA) strictly regulates this sector, requiring all businesses involved with digital currencies to register under the Designated Business Registration and Oversight Act 2015. For companies operating in the virtual asset space, compliance is mandatory. Depending on their specific activities, businesses might need a financial services license, especially if their operations involve issuing, transmitting, or managing digital currencies like Bitcoin or Ethereum. The Isle of Man’s regulations explicitly require businesses to follow Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) laws under the Proceeds of Crime Act 2008. This includes conducting customer due diligence, ongoing transaction monitoring, and ensuring the implementation of robust cybersecurity measures. The IOMFSA has also issued guidance clarifying that certain digital currencies, such as Bitcoin and Ethereum, are not considered securities, which means they fall outside the usual financial regulatory framework. However, activities like running a cryptocurrency exchange or providing storage services for digital assets must comply with the island’s strict regulatory standards. In recent years, the Isle of Man has updated its regulations to ensure they meet international standards, especially in areas like data protection and cybersecurity. These updates have made the Isle of Man a secure and transparent environment for businesses, but the rigorous requirements can be costly and challenging, particularly for startups or smaller firms. #IsleOfMan #VirtualAssets #CryptoRegulation #FinancialServices #DigitalCurrency #IOMFSA #AMLCompliance #ManxCulture #CelticHarp #TraditionalMusic Picture: Charles Guard with Celtic Harp

In a move to protect its users and regulate the operations of cryptocurrencies in the country, the government has established a Multi Agency Technical Committee, tasked with monitoring frameworks for usage of cryptocurrencies or virtual Assets (VAs) and the providers of virtual or digital assets, Virtual Asset Service Providers (VASPs). According to National Treasury Cabinet Secretary Prof Njuguna Ndung’u, Cryptocurrency is quite a new phenomenon in Kenya and lacks the regulatory framework exposing consumers to frauds and scams thus the need for the committee. The financial institution industry regulator, Central Bank of Kenya (CBK) ,is a part of the formed working group. https://lnkd.in/gBJW2dhN

While awaiting the Lithuanian National Risk Assessment, I recommend taking a look at the latest report by FIU Sweden: "Crypto Exchange Providers - Professional Money Launderers." The report highlights how illicit crypto exchange providers, often individuals offering unlicensed and illegal services, are converting criminal proceeds into cryptocurrencies - or the reverse - turning cryptocurrency earned from crime into cash or other assets. FIU Sweden identifies these providers as a growing threat within money laundering schemes and a key enabler of organized crime. In addition to covering important topics such as modus operandi, specific crypto exchange provider subgroups, and real case examples, the report offers few recommendations for financial institutions and legitimate crypto trading platforms: - Ensure monitoring systems can detect deviant transaction patterns linked to crypto platforms and suspicious transfers between account holders. - Additional attention should be given to high volumes of instant payments, with deeper investigations into such activity. - Crypto trading platforms need to be very observant of any deviant patterns of trading on their client’s wallets, and on that basis take necessary actions with regards to the AML legislation requirements. As the MiCA licensing process approaches, we can expect enhanced oversight and better mechanisms to identify and tackle unregulated providers. Nevertheless, a strong AML framework remains crucial in preparation for MiCA’s full implementation. #AML #Crypto

Aiden Pleterski, known in the crypto community as the “Crypto King,” and his associate Colin Murphy have been formally charged with serious #financial offenses. These charges emerged from an extensive joint investigation, Project Swan, conducted by the #Durham Regional #Police Service (#DRPS) and the Ontario #Securities Commission (#OSC). The investigation focused on allegations of #fraud and #money laundering centered in #Ontario, particularly in #Whitby and #Oshawa, the respective residences of Pleterski and Murphy. #antimoneylaundering #AML #moneylaundering #dirtymoney #CFT #counterterrorismfinancing #financialcrime #financialcrimes #compliance #complianceofficer #duediligence #terroristfinancing #pep #sanctions #audit #FinancialIntelligenceUnits #FIU #SuspiciousActivityReport #cdd #kyc #regulations #CFP #risk #riskmanagement #investigation #monitoring #digital #cryptocurrency #crypto #blockchain #virtualcurrency #btc #ethereum #bitcoin #digitalassets #virtualassets #stablecoin #nft #eth #ltc #token #canada #ca

🔒 Fraud is a feature not a bug in the Crypto space 🔒 Cryptocurrencies have revolutionized the financial landscape, offering unprecedented levels of convenience, efficiency, and innovation. However, the same features that make crypto appealing—anonymity, decentralization, and borderless transactions—also make it a potent tool for illicit activities, particularly money laundering. With only a few crypto companies getting the greenlight by the FCA, there is a concern that Britain is being hindered in becoming a global hub in Crypto. It will be interesting to see as the general election comes and goes if the governments friction with the FCA will intensify. However it has to be reminded, money laundering is not a victimless crime. It enables a wide range of illegal activities, from drug trafficking to terrorism financing. As such, unchecked money laundering within the crypto space can have far-reaching consequences for global security and economic stability. 🛡️ What Can Be Done 🛡️ Stronger KYC/AML Protocols: Implementing robust Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures can help identify and prevent illicit activities. Regulatory Collaboration: Global cooperation among regulatory bodies is crucial. Harmonized regulations can close loopholes that money launderers exploit. Advanced Monitoring Tools: Leveraging AI and blockchain analytics can enhance the detection of suspicious transactions and patterns. Let's advocate for a balanced approach that preserves the innovative spirit of crypto while ensuring it does not become a safe haven for criminal activity. The future of cryptocurrency depends on our ability to secure it. #Crypto #Blockchain #MoneyLaundering #Regulation #Fintech #Security #KYC #AML #FinancialCrime #Innovation #EnhancedDueDiligence Link to article: https://lnkd.in/eKSdWnXd

CryptoCompliance CryptoCompliance refers to the process of ensuring that cryptocurrency-related businesses and activities comply with relevant laws, regulations, and industry standards. Key Areas of CryptoCompliance: 1. Anti-Money Laundering (AML) 2. Know-Your-Customer (KYC) 3. Counter-Terrorist Financing (CTF) 4. Securities and Exchange Commission (SEC) regulations 5. Financial Industry Regulatory Authority (FINRA) guidelines 6. Tax compliance 7. Data protection and privacy 8. Licensing and registration Benefits of CryptoCompliance: 1. Reduced risk of regulatory penalties 2. Enhanced reputation and trust 3. Improved investor confidence 4. Better protection against financial crimes 5. Compliance with global standards CryptoCompliance Tools and Solutions: 1. Compliance software 2. Risk assessment platforms 3. AML/KYC verification tools 4. Regulatory tracking services 5. Consulting and advisory services Regulatory Bodies: 1. SEC (US) 2. FINCEN (US) 3. IRS (US) 4. FATF (International) 5. EU's European Securities and Markets Authority (ESMA) Best Practices: 1. Conduct regular risk assessments 2. Implement AML/KYC procedures 3. Maintain accurate records 4. Train staff on compliance 5. Continuously monitor regulatory updates Challenges: 1. Evolving regulatory landscape 2. Lack of clarity on regulations 3. High compliance costs 4. Balancing compliance with innovation 5. Ensuring global consistency Training and Resources: 1. Cryptocurrency Council for Innovation (CCI) 2. Blockchain Association 3. CryptoCompliance certification programs 4. Industry conferences and webinars 5. Regulatory body guidelines Stay updated on CryptoCompliance to ensure your business or investments remain compliant and secure. #CryptoCompliance #CryptocurrencyRegulations #BlockchainLaw #FinancialRegulation #ComplianceOffice

📈 New Cryptocurrency and Digital Asset Regulations in the UAE 📈 Effective Date: May 2024 The UAE has introduced new regulations for the cryptocurrency and digital asset sectors to create a secure, transparent, and compliant environment. These updates are designed to meet global standards while addressing the specific challenges of the digital asset space. 🔹 Key Regulatory Highlights: 💠 Comprehensive Licensing: All cryptocurrency exchanges and digital asset service providers in the UAE must obtain comprehensive licenses. This ensures that only entities that meet strict regulatory standards can operate, promoting a well-regulated market. 💠 Due Diligence: The licensing process includes thorough due diligence and background checks to confirm that entities are financially sound, transparent, and ethical in their operations. 🔹 AML and CFT Compliance: 💠 Mandatory Procedures: Digital asset transactions must comply with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations. This includes robust Know Your Customer (KYC) protocols and continuous monitoring of transactions. 💠 Risk-Based Approach: Companies must tailor their AML/CFT measures based on the risk profile of their customers, ensuring that high-risk activities are closely scrutinized. 🔹 Consumer Protection: 💠 Secure Transactions: The regulations mandate secure transaction protocols to protect digital assets from theft and fraud. Platforms must use the latest security technologies. 💠 Fraud Prevention: Providers must implement real-time monitoring systems to detect and prevent fraudulent activities before they impact consumers. 💠 Transparency: Companies are required to provide clear information about the risks, fees, and terms associated with digital assets to protect consumers. 🔹 Stricter Oversight: 💠 Central Bank's Role: The UAE Central Bank will oversee compliance with financial regulations, ensuring providers maintain financial health and reserves. 💠 Securities and Commodities Authority (SCA): The SCA will regulate the trading of digital assets classified as securities, ensuring transparency and investor protection. 💠 Penalties for Non-Compliance: Significant penalties, including fines, license suspensions, and criminal charges, are introduced to deter illegal activities and ensure market integrity. 🔹 Market Impact: 💠 Boosting Confidence: These regulations are designed to enhance investor confidence, making the UAE an attractive destination for digital asset investments. 💠 Fostering Innovation: The rules will support the growth of a secure and innovative digital asset ecosystem, positioning the UAE as a global fintech leader. 💠 Global Alignment: The UAE's framework is ensuring compliance with global regulatory bodies like the Financial Action Task Force (FATF). #UAE #Cryptocurrency #DigitalAssets #Regulations #Licensing #AML #CFT #ConsumerProtection #SCA #CentralBank #Fintech #Blockchain #DigitalEconomy

European Union Implements Updated Anti-Money Laundering Regulation: Impact on Cryptocurrency Industry ExplainedLast updated: April 25, 2024 06:36 EDT | 2 min read The European Union (EU) has formally passed a new anti-money laundering regulation (AMLR), applicable to all crypto-asset service providers (CASPs). The laws would provide more powers to Financial Intelligence Units (FIUs) to detect and combat money laundering and terrorist financing. Per a Wednesday’s announcement, the package of legislations would impact crypto exchanges, brokers, regulated under MiCA (Markets in Crypto-Assets Regulation). These laws include “enhanced due diligence measures,” after which, obliged entities including crypto-asset managers must report suspicious activities to FIUs. “If you want to use a CASP though for... https://lnkd.in/d-_QkXFX #AntiMoney #Cryptocurrency #European #Explained #Impact #Implements #industry #Laundering #regulation #Union #updated