AML Weekly – 13 September 2021

In this report we observe and track all relevant events that have unfolded in the Anti-Money Laundering (AML) and digital asset space in the past seven days.


With BTC price is dancing around at USD$45,000.00, there could not have been a better time for Mastercard to acquire CipherTrace and enhance its crypto capabilities. “With the rapid growth of the digital asset ecosystem comes the need to ensure it is trusted and safe. Our aim is to build upon the complementary capabilities of Mastercard and CipherTrace to do just this.” says Ajay Bhalla, president, Cyber & Intelligence at Mastercard.

The U.S. Treasury Department has during the course of last week set up round table discussions with various stakeholders to ventilate the pros and cons of stable coins. This comes as the market cap for stable coins turned at the USD$125b mark and there is still no clear regulation cemented for most of them. On the other side of the world, the governor of Sweden’s central bank, Stefan Ingves, has dismissed BTC and compared it to trading with private stamps and stated that “private money usually collapses sooner or later.” It has also been interesting to see that former regulators are being snatched up by key players in the crypto industry; however, it seems that they are struggling to keep them as the crypto industry is truly one of a kind. The Toronto Police Service is now advising the public against a new phishing scam that involves crypto currency exchanges.

It seems as if Panama is following suite of El Salvador as congressman Gabriel Silva has presented a crypto bill for tabling and explained that “[w]e seek to make Panama a country compatible with the blockchain, crypto assets, and the internet. This has the potential to create thousands of jobs, attract investment, and make the government transparent.” It is still early days but is seems as if the objectives of the bill is that BTC and ETH be used as currency.


The Australian Transaction Reports and Analysis Centre (AUSTRAC) has called on all regulated entities to incorporate the Financial Action Task Force’s (FATF) amended call to action and grey list into their risk assessment and compliance controls. Failure to adhere might result in increased exposure of the entities and ultimately fines, additional liability or orders. The Securities and Exchange Commission (SEC) is now pushing for the revocation of Huboi’s license as the exchange has been dragging feet for far to long.  The SEC’s announcement comes after various violations by the exchange including its management structure – the exchange will now have three months to cease all operations and return all assets to its clients.

Keeping with the SEC, Coinbase is now facing a possible lawsuit over its Lend feature although the SEC has not been totally forthcoming about its concerns over the feature. The SEC is also now investigating Uniswap and although no wrong doing has been made public, it seems as if the investigation is steering towards how investors use the exchange and how it is marketed.

The chair of the Financial Conduct Authority (FCA) in a recent speech at the Cambridge International Symposium on Economic Crime stated that legislators need to consider the following when regulating crypto: “how to make it harder for digital tokens to be used for financial crime; how to support useful innovation; and the extent to which consumers should be free to buy unregulated, purely speculative tokens and to take the responsibility for their decisions to do so.” Financial Sector Conduct Authority (FSCA) in South Africa, has issued an official warning against the Binance Group alleging that they are not authorized to give any financial advice or render any  intermediary services. Binance has however push back and stated that “it is compliance with local regulators, is not offering financial advice or intermediary services to residents and “ is registered with the FIC as a voluntary self-disclosure institution.”


In the USA, the Internal Revenue Authority (IRS) has cleared its calendar and will be actively prioritize its new crypto broker guidance. Geneva’s revenue authority will now have the opportunity to show is long arm and recoup almost USD$136m in unpaid taxes from Prakash Hinduja who was falsely claiming residency in Monaco to avoid paying Swiss taxes. HM Revenue and Customs  has now offered a settlement to members of the Eclipse film finance scheme  which has now been labeled one of the largest in UK tax History. The Cream Finance hacker has returned USD $17.6m worth of ETH for no apparent reason – this totals 90% of the funds initially transferred as part of the hack.


In the US an ex-marine was pulled over by police who seized USD$87,000 in cash but don’t charge him with a crime. This was a quite a fascinating situation as a sniffer doc detected traces of drugs on the cash; however, no physical was located and police could not charge him with an official crime. SEC charged the Kraft Heinz company and two former executives for engaging in years-long accounting scheme which resulted in restatement of several years of financial reporting. Michael Ackerman has pled guilty to wire fraud before United States Chief District Judge for his involvement in a multimillion-dollar cryptocurrency investment scheme.  A student who made £20,000 by hacking a Welsh university security system and selling exam papers and coursework has been sentenced to 20 months in prison.


In this week’s report we see a stronger move towards to acceptance of BTC and DeFi as Panama might also be moving towards adoption of a crypto Bill; however, other jurisdictions such as Sweden have not yet purchased a ticket for the crypto train. SEC, FCA AND FSCA have all issued warnings to various exchanges but AUSTRAC has encouraged regulated entities to incorporate the FATF recommendations on call to action and grey lists into their risk assessment and compliance controls to show a united front.

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