AML Weekly – 16 August 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.


Covid has not only disrupted the way we live but also the way we perceive financial crime and more specifically, money laundering. As more and more reports are being published of cybercrime in the financial services sector, the increased activity has led to firms in the sector investing in artificial intelligence and machine learning tech to counter cybercrime and money laundering. Staying with global trends, Elliptic’s Global Policy and Research Group released their stake on the global crypto regulation from 2015 to 2021, and the results are quite interesting. As each jurisdiction has the option to follow guidance notes issued by regulators, it still remains up to them which path they will follow. In a surprising trend Elliptic found that the majority of the jurisdictions followed what they know best and mirrored the traditional approach to financial products.

In a great initiative, the Crypto Fraud and Asset Recovery (CFAAR) has opened its doors, bringing together some of the world’s leading names in crypto disputes and advisory with the purpose of developing and sharing best practice in this rapidly evolving sphere and placing the UK and common law jurisdictions at center stage for global crypto dispute resolution. For those wanting to take part in the group’s mantra, feel free to join them on LinkedIn. Binance is now also being investigated by authorities in India for its alleged involvement in a Chinese money laundering case. The investigation centers around the US$134m it earned through betting apps and it has been confirmed that the exchanges executives have been summoned by the Enforcement Directorate (ED). Binance has denied that summons has been issued and that “the summons was directed to only Wazirx.” The HSBC has also joined forces with Barclays and Clear Junction to crackdown on the exchange.

Mexico’s financial services regulators the Mexican Financial Intelligence Unit (MFIU) now claims that 12 digital asset exchanges are operating illegally in its jurisdiction. These exchanges are currently operating without a license and may face criminal and monetary penalties. China’s crackdown on crypto mining has sent local miners on a global hunt for greener pastures to host their machines. North America, Central Asia, Latin America and Europe have all been identified as possible locations for the miners to settle down; however, lead times to build out hosting sites, energy and labor costs, tax regimes, climate and political and business environments are but to name a few of the things these miners are considering.


A surge in crypto scams and money laundering reports showcases a new playground for cyber criminals in Africa. This follows a substantial increase in crypto transfers and crypto laundering in Nigeria, South Africa and Kenya; including, MTI and Africrypt. The Basel Institute on Governance (BIG) took a deep dive in cryptocurrencies and money laundering investigations wherein it was found that cryptocurrencies are used to: launder normal proceeds, i.e., bribes; crimes to generate profits in cryptocurrency by facilitating payments for various forms of illicit activities, and drug trafficking and ransom payments. The institute also found that law enforcement can mirror the following recommendations to fight crypto money laundering: apply a multi-disciplinary approach; utilize new technologies and investigate different strategies.

In the US, the Cyber Security & Infrastructure Agency (CSIA), has established a new unit to lead the developments of the nation’s cyber defense plans, which outline activities to prevent and reduce the impacts of cyber intrusions. The newly formed Joint Cyber Defense Collaborative (JCDC) will bring together public and private sector entities to unify deliberate and crisis action planning while coordinating the integrated execution of these plans. Scotland’s Supreme Court is in the process of reviewing an earlier decision by its Parliament not to investigate former US president Donald Trump for his purchase of the Turnberry Golf Club. The investigation will form part of Scotland’s new unexplained wealth order law which was created in 2018 and will be the first in its nature. The Internal Revenue Service (IRS) has seized US$1.2B worth of crypto this year alone and holds auctions for its stockpile of bitcoin, ethereum, litecoin and other cryptocurrencies it seizes. It has also indicated that it has no plans to step back from its side hustle as a crypto broker.

French tax authorities are now using online social media networks such as Facebook, Twitter, Instagram, YouTube and TikTok in its fight against fraud and tax evasion. Sarah Panitzke has made it onto Britain’s most wanted as she laundered £1B of illicit funds into offshore accounts and disappeared into thin air. It has been six years since authorities stared the chase; however, Panitzke still remains on the run. The Financial Intelligence Unit (FIU) in Netherlands has uncovered several suspicious transactions in the equestrian industry roughly amounting to 100 million euros. This comes after deals are struck at the shake of a hand an no records of money flowing in or out of the Netherlands, makes it almost impossible to trace.


Ukraine law enforcement agency the Security Service of Ukraine (SBU) has busted crypto exchanges after allegedly making in excess of US$1m monthly turnover and sending money to wallets operated by Russian payment providers. Spanish police seized more than 1,100 KG of cocaine hidden inside the walls of a shipping container in Valencia.

Poloniex has been charged by the US Securities and Exchange Commission (SEC) for operating an unregistered online digital asset exchange in connection. Following the charges Poloniex has agreed to pay US$10,000.00 to settle the charges as it operated a trading platform from July 2017 to November 2019 that facilitated the buying and selling of digital assets that were investment contracts and therefore securities which violated section 5 of the Exchange Act. The SEC has also charged the Defi lender: DeFi Money Market and its two owners with offering and selling securities totaling US$30m through unregistered platform and misleading investors concerning the operations and profitability of their business. The Respondents were ordered to pay a total of US$12,849,354.00 and prejudgment interest of US$258,052.00 to the SEC in addition to the US$125,000.00 for each of the owners. Lastly, the SEC obtained Default Judgement in the Edgar Hacking Case – the court ordered the accused to pay US$12,405,045 and US$3,283,305 respectively.

The Financial Crimes Enforcement Network (FinCEN) has issued a civil penalty in the amount of US$100m against BitMEX for as operating as an unregistered futures commission merchant and providing money transmission services willfully, thereby failing to comply with its obligations under the Bank Secrecy Act (BSA).

A tax fraudster from Gateshead, Stanly Miller, has been ordered to re-pay almost £6 million. An investigation by HMRC found that he had been deliberately evading VAT, income tax and National Insurance payments between 2008 and 2016. The Bank of N.T. Butterfield & Son Limited has entered into a forfeiture and restitution / non-prosecution agreement with the DOJ for assisting US clients to open foreign bank accounts in 2001 to 2013. Butterfields agreed to pay US$5.6m in order to settle the matter. Carlos Gentil Ordonez Martinez was sentenced to 210 months’ imprisonment by United States District Judge for conspiracy to internationally distribute cocaine. Two criminals linked with the QQAAZZ Organization have pleaded guilty or their roles in the cybercriminal money laundering organization. QQAAZZ was a European-based money laundering organization that provided illegal cash-out and cryptocurrency transactions for computer hackers and their associates.


It has been an exciting week in crypto and AML sphere as we not only see regulatory organizations being formed within governments, but there is now a drive of groups established to combat crypto fraud and asset recovery. From the formation of CFAAR and JCDC to crypto miners seeking greener pastures and the IRS’ new side hustle as a crypto broker, one thing is for sure, the crypto world is leading the pace.

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