Category: Regulation

U.S. Departments of Treasury and Justice Launch Oligarch Whistleblower Programme

Regulation, Sanctions
The US Department of Treasury’s Financial Crimes Enforcement Network has created a new whistleblower programme that will pay more than $5 million to any whistleblower with original information that helps them seize assets of Russian elites seeking to evade US sanctions. Titled the Kleptocracy Asset Recovery Rewards Program, the scheme is aimed at seizing stolen assets by elites and their associates and the proceeds of their corruption. The Treasury Secretary can authorise greater amounts than $5 million should a case merit it. Jeffrey Newman, a partner in the firm of Newman & Shapiro which represents whistleblowers worldwide, said:“This programme can…

Anti Money Laundering Body Puts UAE on Global ‘Gray’ List

Regulation, Whistleblowing
DUBAI, United Arab Emirates — A global body focused on fighting money laundering has placed the United Arab Emirates on its so-called “gray list” over concerns that the global trade hub isn’t doing enough to stop criminals and militants from hiding wealth there. The decision late Friday night by the Paris-based Financial Action Task Force puts the UAE, home to Dubai and oil-rich Abu Dhabi, on a list of 23 countries including fellow Mideast nations Jordan, Syria and Yemen. While not expected to dent business in the Emirates, a federation of seven sheikhdoms on the Arabian Peninsula home to a…

New Zealand Moves to Crack Down on Corporate Secrecy After Pandora Papers

Money Laundering, Regulation
New Zealand has pledged to end corporate secrecy by establishing a public beneficial ownership registry. The government announced a new transparency bill this week to stop the abuse of locally-based, secretive companies by criminals. The legislative crackdown came in response to revelations made in the International Consortium of Investigative Journalists’ Pandora Papers investigation, the government said. The proposed law, to be introduced later this year, will require companies and limited partnerships registered in New Zealand to disclose the identity of the person who owns or controls them. “The Pandora and Panama papers highlighted some key vulnerabilities which need to be…

Boris Johnson Promises U.K. Property Register to Expose Kleptocrat Money

Money Laundering, Regulation
As the government acts to squeeze Russian oligarchs in the wake of Vladimir Putin’s invasion of Ukraine, Boris Johnson has promised to rush forward plans for a new public register, revealing the ultimate owners of properties across the UK. The government had previously failed to act, despite the vast offshore leak known as the Pandora Papers revealing last year the details of 1,500 UK properties owned through secretive offshore companies, some of them connected to senior Russian figures. The data showed that the family of Russian oligarch Mikhail Gutseriev – who was placed under sanctions by the UK, EU and…

No 10 Pressured Me to Drop Anti-Money Laundering Measures, Says Ex-Minister

Money Laundering, Regulation
A former Conservative minister, once at the heart of efforts to clamp down on money laundering in London, has revealed that during Theresa May’s premiership, No 10 “leant on him” when he tabled amendments to introduce a public register of overseas property owners. Lord Faulks said he had first tried to put the register into the criminal finances bill in 2017 and then again into a government bill on money laundering in 2018. He had described the overseas ownership of “dirty money” in London as an obscenity. Faulks, a distinguished barrister and now an independent peer, told the Guardian he…

The U.S. Releases its First-Ever Strategy on Countering Corruption

Corruption, Regulation
Corruption is a cancer within the body of societies—a disease that eats at public trust and the ability of governments to deliver for their citizens. The deleterious effects of corruption impact nearly all aspects of society. It exacerbates social, political, and economic inequality and polarisation; impedes the ability of states to respond to public health crises or to deliver quality education; degrades the business environment and economic opportunity; drives conflict; and undermines faith in government. Those that abuse positions of power for private gain steal not just material wealth, but human dignity and welfare. Recognising corruption’s ability to corrode democracy,…

Cryptocurrency – Cardiff Terrorist Khuram Iqbal Jailed Over Trading

Corruption, Regulation
A convicted terrorist has been jailed for 16 months over his cryptocurrency trading on the dark web. Khuram Iqbal, 29, from Cardiff, was originally jailed in 2014 for three years and three months for disseminating terrorist publications and possessing terrorist information. He was released on licence in May 2015 but recalled to jail in 2016. Iqbal breached a 10-year notification order by failing to tell police about two cryptocurrency accounts. He pleaded guilty to four breaches between July 2019 and August this year and appeared at the Old Bailey to be sentenced by Mr Justice Sweeney. The defendant had originally…

FinCEN Launches Regulatory Process for New Real Estate Sector Reporting Requirements

FinCEN, Money Laundering, Regulation
WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) announced today an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on a potential rule to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity. The systemic money laundering vulnerabilities presented by the U.S. real estate sector, and consequently, the ability of illicit actors to launder criminal proceeds through the purchase of real estate, threatens U.S. national security and the integrity of the U.S. financial system. FinCEN has long been concerned with the potential for corrupt officials and illicit actors to launder the proceeds of…

FinCEN Seeks Comments on Modernization of U.S. AML/CFT Regulatory Regime

FinCEN, Money Laundering, Regulation
WASHINGTON— Today, FinCEN is issuing a request for information (RFI) seeking comments on ways to streamline, modernize, and update the anti-money laundering and countering the financing of terrorism (AML/CFT) regime of the United States. FinCEN is particularly interested in comments on ways to modernize risk-based AML/CFT regulations and guidance, issued pursuant to the Bank Secrecy Act (BSA) so that they, on a continuing basis, protect U.S. national security in a cost-effective and efficient manner. Today’s RFI also supports FinCEN’s efforts to conduct a formal review of BSA regulations and related guidance, which is required by Section 6216 of the Anti-Money…

Thailand to Define ‘Red Lines‘ for Crypto in Early 2022

Digital Currencies, Regulation
“Cryptocurrencies cannot become a means of payment,” Bank of Thailand governor Sethaput Suthiwartnarueput stated. The government of Thailand is preparing a new regulatory framework for cryptocurrencies like Bitcoin (BTC) to minimize risks and improve investor protection. The Bank of Thailand (BoT) will release a consultation paper in January that will define “red lines” for the crypto industry, governor Sethaput Suthiwartnarueput said in a Dec. 14 interview with The Bangkok Post. “We want to ensure that we strike the right balance between allowing financial innovation and managing risks,” the official stated. The new rules will provide adequate safeguards for consumers as…

Singapore: MAS Proposes Information Sharing to Prevent Money Laundering & Terrorism Financing

Money Laundering, Regulation
The Monetary Authority of Singapore (MAS) has released1 for consultation the proposals in its paper, FI-FI Information Sharing Platform for AML/CFT, which will require Financial Institutions (FIs) to share with each other information on customers or transactions, where they cross material risk thresholds, on a secured digital platform owned and operated by MAS to be named ‘Collaborative Sharing of ML/TF Information & Cases’ (COSMIC). Although the proposals are primarily addressed to the initial participant FIs that MAS has identified as major players in the commercial and small-medium enterprises banking segment comprising the three local banks and three qualifying full banks,…

FATF’s Updated Guidance Tells Regulators to Focus on Business Models Over Technology and Terminology

Digital Currencies, Regulation
On October 28, 2021, the Financial Action Task Force (FATF) released its updated guidance for how member jurisdictions should regulate cryptocurrency businesses. Back in March, FATF released a draft version of today’s guidance for industry review — you can read our comments on that release here. Today’s guidance largely mirrors the March proposal, with the key theme being FATF’s focus on regulating cryptocurrency businesses as VASPs based on their function and business model, rather than their underlying technology, self-described business category, or custodial status. Below, we’ll break down the most important provisions of FATF’s guidance and tell you how Chainalysis…

A Single AML Supervisor and Rulebook Might Just Be What’s Needed to Drive True Collaboration in Europe

Regulation
As European finance ministers agreed to progress plans for a major reform of anti-money laundering regulation in the European Union, Nina Kerkez outlines the likely benefits and challenges. Earlier in November, European finance ministers agreed draft proposals for establishing a single rulebook and centralised supervision within the European Union for anti-money laundering (AML) and terrorism financing (TF). The Economic and Financial Affairs (ECOFIN) council has backed up the Commissions approach to present legislative proposals in early 2021. It is expected that the reforms should be drawn up in a comprehensive way, and the Commission will have to ensure that legislation…

Is FATF Playing Politics With Pakistan

FATF, Regulation
When the Financial Action Task Force (FATF) disclosed in June that Pakistan would remain on its list of jurisdictions under increased monitoring, critics of the decision responded with a question: is the intergovernmental watchdog’s criticism of Pakistan largely political? Such an argument may seem, at least superficially, to be borne out by the facts. After all, critics noted, Pakistan completed 26 of the 27 steps required of it under a 2018 FATF action plan. After praising Pakistan’s efforts to date, FATF in June called on the nation to take six additional steps, including enhancing its international cooperation on financial-crime investigations,…

Israel to impose new AML rules on digital currencies

Digital Currencies, Money Laundering, Regulation
Israel is bringing its digital currency industry under the purview of its anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. The move is meant to stamp out crime from the sector and give it legal recognition and certainty. Israel’s Authority for Combating Terror Financing and Money Laundering recently announced that it’s seeking to raise its monitoring of digital currency transactions. Authority Director Shlomit Wegman said that the move would give the agency the ability to stamp out crime from Bitcoin. With the new regulations, virtual currency service providers (VASPs) now have clear standards to operate under, Wegman…

Register of True Owners of Anonymous Companies on Track to Become a Worldwide Requirement

Regulation
The Financial Action Task Force’s proposed measures for strengthening the global standard a positive development in eliminating corporate secrecy Transparency International welcomes the proposed amendments to the global standard on company ownership, released yesterday. The draft revisions, put forward by the Financial Action Task Force (FATF) following a three-day plenary, have the potential to significantly strengthen countries’ resistance to dirty money. Most notably, FATF is finally gearing up to require that all countries set up a beneficial ownership register or use an alternative mechanism with equal efficiency. The encouragement for countries to make the registers public falls short of Transparency…

How Governments Around the World Regulate Cryptocurrency

Digital Currencies, Regulation
In the early days of blockchain technology, cryptocurrencies operated in a gray area of the economy, their applications as unique as they were unregulated. But since then, as financial institutions have entered the industry and adoption has soared, the risk calculus has changed for regulators. While governments around the world have taken major steps to combat cybercrime and protect the users of cryptocurrencies, many believe the work is far from over. For this reason, it’s critical for investors, businesses, and institutions in the industry to understand both how governments regulate cryptocurrencies and how industry leaders can push the conversation forward.…

Chinese Regulators Unite Forces to Crack Down on Crypto

Digital Currencies, Regulation
The Chinese central bank is setting up a “coordination mechanism” with state agencies to continue battling crypto. The Chinese government is getting more serious about cracking down on the cryptocurrency industry as state authorities are bringing forces to combat crypto operations in the country. The People’s Bank of China (PBoC) officially announced on Friday a set of new measures to fight against crypto adoption in China, including promoting stronger inter-departmental coordination in cracking down crypto activity. 10 Chinese state authorities, including the PBoC, the Cyberspace Administration of China and the Ministry of Public Security, have established a “coordination mechanism” to…

29 Crypto Exchanges Meet Registration Deadline But Face Challenges

Digital Currencies, Regulation
Twenty-nine of Korea’s 66 cryptocurrency exchanges met a legal deadline to put themselves under regulatory supervision, but they still face challenges, market insiders said Sunday, such as risks from legal breaches and an inability to convert coins into Korean won. The Financial Services Commission said Saturday that 29 exchanges submitted applications to register their businesses by Friday and will process them within three months, legitimizing their status as market players but also subjecting them to regulatory monitoring and supervision. The registration brings them out of local legal blind spots, but the exchanges now have to abide by global rules on…

Transforming to a Forward Looking Regulator – Nikhil Rathi, FCA CEO

Regulation
Highlights Being more innovative – data is the lifeblood of a modern regulator. Being more assertive – acting decisively and being clear about what we’re doing, why we’re doing it and where the limitations lie. Being more adaptive – working flexibly to respond to ever-changing challenges. Measuring our success – we will be clearer on what outcomes matter and what metrics we use to measure them. When I became CEO last October, I joined a purposeful organisation. Our people working round the clock with great energy and to great effect to stand up for consumers and businesses affected by the…

European Commission Overhauls Anti-Money Laundering and Countering the Financing of Terrorism Rules

Money Laundering, Regulation
The European Commission has today presented an ambitious package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing (AML/CFT) rules. The package also includes the proposal for the creation of a new EU authority to fight money laundering. This package is part of the Commission’s commitment to protect EU citizens and the EU’s financial system from money laundering and terrorist financing. The aim of this package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system. As…

Binance Crackdown: Regulators Tussle with the “Wild West” World of Crypto

Digital Currencies, Regulation
Changpeng Zhao’s company Binance is everywhere and yet based nowhere. The cryptocurrency exchange has processed trillions of dollars in trades this year as it transfers digital and conventional money around the world through a constellation of affiliates. And yet it has no headquarters. Incorporated in the Cayman Islands, the company has grown at extraordinary speed into a leading player in the fledgling industry. But the 44-year-old Canadian-Chinese mogul’s business empire is now attracting intense scrutiny from global watchdogs as they grapple with new financial entities that act in many jurisdictions but are rooted in none. Binance has led a peripatetic…

Binance CEO ‘Responds to Global Regulatory Pressure Calling Compliance a Journey’

Digital Currencies, Regulation
“We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ. Binance CEO Changpeng “CZ” Zhao has likened the recent pressures by regulators against his exchange business to that of the initial development of the car. In an open letter on Wednesday, CZ said the adoption and development of crypto contained many parallels to regulations around automobiles in that “laws and guidelines were developed along the way.” “We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ. “More regulations are, in…

AML Compliance Mandatory for Foreign Crypto Exchanges, says Korean Regulator

Digital Currencies, Regulation
South Korea’s strict crypto regulatory oversight is now extending to overseas exchanges that offer cryptocurrency trading services denominated in the country’s currency. Eun Sung-soo, chairman of South Korea’s Financial Services Commission (FSC), said that foreign crypto exchanges that deal in the Korean won must comply with the country’s Anti-Money Laundering (AML) standards. According to The Korea Herald on Tuesday, Eun made these comments while fielding questions from lawmakers about the FSC’s plans to regulate crypto exchange giant Binance. Eun reiterated the need for overseas exchanges offering won-denominated crypto trading pairs to comply with the same Anti-Money Laundering standards as platforms…

FATF’s Proposed Updated Guidance for Cryptocurrency Regulation

Digital Currencies, Regulation
On March 19, 2021, the Financial Action Task Force (FATF) released proposed updates to its 2019 guidance for how member jurisdictions should regulate and supervise the cryptocurrency ecosystem. If adopted by FATF and implemented by member jurisdictions, the new guidance would expand the definition of Virtual Asset Service Providers (VASPs) to include many non-custodial cryptocurrency businesses, making them subject to AML/CFT regulations. While Chainalysis is in favor of regulations that effectively prevent financial crime, we believe parts of the proposed guidance overreach by placing an unreasonable regulatory burden on new and emerging cryptocurrency markets where no evidence of criminal activity…

Ireland stops anonymity in trading of cryptocurrency

Digital Currencies, Regulation
BUYERS and sellers of Bitcoin and other cryptocurrencies are no longer able to trade virtual assets anonymously in Ireland under an expanded anti-money laundering regime. As of today, cryptocurrency service providers in Ireland will have to comply with money laundering rules and other basic regulations for the first time. This means that they must register with the Central Bank and carry out due diligence on their customers, which entails accounting for the origin and destination of client assets. The Central Bank has warned all companies that exchange or transfer virtual assets like Bitcoin, as well as those that provide financial…