AML Weekly – 2 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.


After the doubling of crypto users in the past 6 months and a 10 day winning streak for Bitcoin, US regulators such as the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Federal Reserve (FR) and the Office of the Comptroller of the Currency (OCC), are turning their attention to the DeFi space. This follows warnings that certain activities might be illegal under federal law and pose serious danger to consumers. The DeFi space which is known for its core values of automation, transparency, reduced costs and decentralization may also place its users in danger as reports emerge of customer risks. The regulators have further called on stakeholders in the space to work with them in order to find a balance and future solution.

Anchorage has been awarded a contract by the U.S. Marshals Service to manage the USD$6,6m recently seized by it. Pirate Bay, one of the world’s largest torrent tracking websites has earlier this year launched its very own piratetoken (TPB). As this may be something different than what the torrent site usually gets up to, its aim is with the token is to make available: “donat[ions] to uploaders; donat[ions] to moderators; direct video streaming through partners; VIP content; member logins based on BSC address and file hosting through partners.”

Huobi draws a new corporate structure as it shuts down its Beijing entity following the jurisdictions increased lockdown on crypto. Despite the crypto space being increasingly regulated, Coin ATM Radar has released data that suggests that the number of crypto ATMs installed globally has increased by more than 70% to 24,030 this year, this come from the first 4 crypto ATM’s being installed in 2013. Crypto ATMs installed in 75 different countries and 21,000 of them are situated in the U.S. The New York Department of Financial Services (NYDFS) is now planning to collect diversity data (data that reflects the diversity of their corporate boards and management).

The Financial Conduct Authority (FCA) has issued a warning on Coinburp Limited as it launched its CoinBurp ($BURP) token and Initial DEX Offering. The warning stems from the firm not holding full FCA Registration under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations. The firm; however, has applied for an application for registration with the FCA. Financial Intelligence Unit (UIF) in Mexico has also issued a warning against 12 crypto exchanges for not complying with its reporting requirements as they are not registered and thus operating illegally.  If you want to take a lazy day this week, Transparency International has got you covered with a creative list of 11 movies that can give you some insight into the mind of a whistle-blower. We can recommend that you catch up with Julia Roberts in Erin Brockovich.


Some key fintech players have made their voices heard at an Australian inquiry, stating that various banks are denying them basic transaction services due to regulatory concerns. The difficulties include accessing payment services through Australian banks, which often terminated talks after initial meetings. The Australian Banking Association (ABA) has come on record and is of the view that the banks may chose their own risk appetite, and it is common cause that cryptocurrencies hold an inherent high risk. Indian authorities are also now questioning Binance in whether it WazirX was used in a money-laundering operation related to betting apps that have collected more than USD$134m.

Lombard International Assurance (LIA) is allegedly being investigated by Milan prosecutors for tax evasion and money laundering failing by to disclose to domestic tax authorities income worth around USD$589m. EY, two former top executives of and two US banks are being sued by B.R. Shetty, the founder of stricken UAE hospital operator NMC Health, for alleged multibillion-dollar fraud at his group.

A German court has issued its first ruling in the cum-ex saga (trading shares with (“cum”) and without (“ex”) dividend rights) which involved stockbrokers and banks. Without getting to technical, the cum-ex trading allowed the banks and stockbrokers to trade shares on behalf of unidentified owners, which in turn enabled them to reclaim tax rebates on capital gains taxes. The court issued fines amounting to USD$16.5m for one of the traders and ordered the private German bank to pay back around USD$205,8m. Compass Mining has issued a new product in which its users can now avoid paying taxes on their crypto mining by buying mining hardware through their Individual Retirement Accounts (IRAs). Also in the US a new Infrastructure Bill proposes to raise $28 billion from crypto investors by applying new information reporting requirements to exchanges and other parties.

The well-known pop icon Shakira Isabel Mebarak Ripoll, will now have to stand trial in Spain for allegedly evading €14.5 million in duties and corporate income tax. She may face possible jail time if found guilty in trial. The initial probe has found that she concealed her wealth via a network of companies based in tax havens, but the pop icon has put forward that she was outside the country for an aggregate period of 183 days in the concerned year of assessment and should not pay tax therein. The tax authority holds firm that Barcelona is the place where she naturally returns after her wonderings.


Bosnia and Herzegovina’s Border Police (GPBiH), have busted a drug trafficking network and seized more than 6,000 hemp plants in Velika Kladuša. 28 Domestic helpers have been arrested in Hong-Kong after opening bank accounts which were used to wash US$3.5 million illicit funds. The foreign domestic workers aided in the laundering in that they opened new accounts for which the details were handed over to syndicate leaders in exchange for compensation, the accounts where then used in illicit laundering activities.

Brazil’s police have seized USD$33 million in a money-laundering probe which involved 17 phony companies that wired funds among themselves and several across crypto exchanges. It has now been claimed by police officials that the implicated crypto funds knew exactly what was happening and assisted in laundering the funds and crypto as they did not verify where the funds were coming from. This again places the emphasis on the duty of funds to validate the origin / source of funds prior accepting certain transactions. A man has pleaded guilty in Texas to charges of wire fraud conspiracy in an elaborate scam to over scam to sell NSW government N95 masks he didn’t have for USD$317m. Two brothers were sentenced in Australia for attempting to import USD$152m worth in cocaine. Nathan Baggaley, a former Olympic kayaker and his brother Dru Baggaley have respectively been sentenced to 25 and 28 years for attempting to smuggle 512kg of pure cocaine 3 years ago.


Regulators are taking steps to become actively involved in the digital asset space as the number of crypto users doubled in the past 6 months. As the aim of the increased presence of regulators might be to safeguard the crypto space for its users, there are some stakeholders arguing that despite the good intention to safeguard users and avoid risks, over legislating may result in defeating the purpose of what the crypto space is all about. But this week it is not all bad news as more and more bitcoin ATM are being installed and if you want to take a break, we recommend that have a look at the 11 films to get an idea of what whistleblowing is all about.

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