AML Weekly – 21 June 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.


El Salvador is at it again as the country remains committed to push for adoption of the decentralized currency bitcoin as legal tender. The country has approached the World Bank for technical assistance; however, the world bank has unfortunately denied the request as “is not something the World Bank can support given the environmental and transparency shortcomings.” Perhaps this is something that needs reconsidering as major crypto influencers have subsequently stepped in and offered their assistance to El Salvador. The Financial Conduct Authority (FCA) has published its fourth consumer research publication on cryptoassets ownership which revealed that 2.3 million adults now hold cryptoassets, an increase of 400,000 from last years reported 1.9 million and found that only 1 in 10 persons who had heard of cryptocurrency said they are aware of consumer warnings on the FCA website. The FCA also implemented real-time monitoring and warned Google and social media companies that it will take legal action should they continue to accept advertisements for online financial scams that have flourished during the pandemic.

Taking a deep dive into the importance of data protection, PYMNTS showcases why customers are not always so trusting to provide all their confidential information to entities who must fulfil their Know Your Client (KYC) and Anti-money Laundering (AML) obligations. It is a bit of a catch 22 situation as we all know how important it is for entities to adhere to proper due diligence while still respecting their users right to privacy. In an interesting development, ThetaRay has now partnered with Google Cloud to develop an AI solution that will protect banks, fintechs, PSPs and payments infrastructure companies against money laundering activity hidden within cross-border transactions


In Australia, the Federal Police Cybercrime Operations (FPCO) has set in motion a new taskforce aimed at ransomware operators. On 17 June 2021, Australia’s new AML laws came into effect that will streamline compliance and help protect businesses from the harms of money laundering, terrorism financing and other serious crimes. This will narrow the scope on customer identification and verification, tipping off and customer due diligence before providing a designated service.

In an interesting move, Malta’s Financial Intelligence Analysis Unit (FIUA) published a list of government jobs whose authority and control on vast amounts of money and influence, qualifies them as political exposed persons (PEPs). This comes after Malta received mixed reviews over the last couple of weeks following an evaluation by Financial Action Task Force (FATF) in Paris. The fate of the Mediterranean country will be decided on 23 June 2021 as it can be greylisted or the FATF may order further. South Korea’s Financial Services Commission (SKFSC) now wants to impose even stricter regulations on banks and crypto exchange clients, by mandating banks to be designated high risk clients. The banks will have to deny services to customers that refuse to comply with ID verification procedures, and report suspicious transactions. First National Bank (FNB) based in South Africa has denied any relationship with fraud-accused crypto company Africrypt as the directors have disappeared together with $3.6 billion of unsuspecting users crypto investments.


In the US, the Biden administration is receiving immense pushback on proposals to mandate financial institutions to report customers’ account flow data to the Internal Revenue Service (IRS). The proposal is aimed at all banks and other financial institutions to report inflows and outflows in consumer accounts with more than $600. The pushback comes from banks, credit unions and some consumer advocates. The IRS is also keeping a close eye on Telegram chatter as it is of the view that the cloud-based instant messaging software is being used as a platform for criminals to move and launder funds. This comes after the Commissioner requested mandate from Congress to regulate crypto.

The HM Revenue and Customs (HMRC) is now looking into unfunded pension schemes utilised for avoidance of corporate tax, income tax and national insurance contributions that is achieved by creating expenses in the company portfolio with the end goal to reduce profit and without ever paying out., the online travel agency for lodging reservations & other travel products, is under Italy’s radar for tax evasion in the sum of €153 million. The liability stems from reverse charges of 900,000 transactions where no VAT was declared and paid to Italy.


Wiretapping, surveillance, and micro-cameras where the order of the day as Italian police made five arrests and seized €66 million in complex money laundering operation at an illegal metal recycling business where illicit funds were transfer between Italy and China. A huge cannabis bust has been made in Quinte West Canada, where over 4 million dollars’ worth of cannabis plants have been seized. The Ontario Provincial Police (OPP) has charged three people in connection to the illicit cannabis. Mostafa Baluch, an Australian resident has been charged for financier of an attempt to import almost a ton of cocaine, with potential street value of $270 million, from South America.

Europol has arrested 6 individuals linked to a snatch and grab gang targeting jewelers across the glob from France to Austria. Ukrainian police in a joint operation between South Krea and the US arrested several members of the CLOP ransomware group and seized computers, smartphones, and server equipment, together with $185,000.00. The Latvian based commercial bank Rietumu Banka has been fined €5.85 million by the Financial and Capital Market Commission (FCMC) for infringements of the regulatory requirements regarding anti-money laundering and counter-terrorism and proliferation financing (AML/CTPF).

We bestow immense trust on our health care providers and without a doubt accept the drugs prescribed will cure and remedy our illness. This however was not the case for a New York City doctor who prescribed a powerful opioid / addictive painkiller to patients in exchange for $200,000.00 in bribes from a drug manufacturer. In reward for putting his patients at risk and satisfying his own greed, the doctor also received other gifts in the form of holiday parties and strip club. Unfortunately for the doctor, there is no prescription that can remedy his current pains as he has been sentenced to 5 years in federal prison.


Synthesis Bank, an investment bank built on ethereum smart contract that allows investors to invest in digital assets and other new cyrpto, has been registered in the Cayman Islands. The CEO and Founder Alejandro Estrada stated that: “Synthesis Bank is transparent, agile and above all – focused on crystallizing ongoing dividends and capital growth for token holders. We look forward to generating growth and success for our token holders.” This is great news for the Cayman’s as it shows commitment and trust in its investment, AML and compliance programs.


In this weeks report we see an all-round push for regulation of crypto; however, it appears that not all stakeholders are being openminded in adopting this approach as there are more and more holes found in banking and financial institutions compliance programs. On the bright side, this is not stopping tech giants to evolve and integrate new tech with existing systems that improve compliance and monitoring. As compliance and aml professionals, we have a duty to assist in the harmonization of tech and reg, by ensuring that the tech does not continue to outgrow the regulation.

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