AML Weekly – 6 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 keeping head above water and closing above the USD$50k mark, an opinion piece by Coindesk suggests that the constant swing in crypto markets may be something of the past as the 100x leverage system has been replaced with a weaker blend. Leveraging can be seen as margin trading which in essence is a form of borrowing funds to increase your bet while you trade – thus more risk = more reward. As high x leveraging might see the markets ticking like a heartbeat, various regulators have made their voices heard. This resulted in some of the big players such as Binance and FTX lowered their derivatives to 20 times. The leverage system is only but one of a few things that have an impact on the crypto market; however, it does seem that the lowered rate has calmed the markets, for now.

The Cryptocurrency Compliance Cooperative (CCC) is a new initiative launched by DigitalMint and Coinsource  which aims to establish compliance standards for the BTC ATM industry. The main drive of the initiative is to counter money laundering and comes after there has been a lack of care form historic providers, who are of the opinion that “asking for a cell phone number is enough due diligence to absolve them of their mandated KYC requirements.” VISA has purchased its very first non-fungible token (NFT) – CryptoPunks, for a price of 49.50 ETH, which is about $150,000. They have since come on record and calls it an experience of learning. PayPal will now allow users in the UK to buy, hold and sell cryptocurrencies through the payment platform for the first time. According to Jose Fernandez da Porte (GM at PayPal): “the pandemic has accelerated digital change and innovation across all aspects of our lives, including the digitisation of money and greater consumer adoption of digital financial services.”


As decentralized finance (DeFi) protocol platforms, such as decentralized exchanges and lending platforms continues to grow, the concerns from regulators around their safety remains. To adhere to the safety concerns, Chainalysis has developed its own Global Defi Adoption Index (GDAI), which highlight countries with the highest grassroots adoption by individuals, rather than those sending the largest raw values of funds. After Financial Action Task Force’s (FATF) Travel Rule recommendations in May 2021, there has been many developments in the crypto space and various input and suggestions by key stakeholders. In Australia, Government has now commented that “it depends on the way that [the travel rule] is implemented so a technological solution that takes a lot of the legwork out of that would be a game changer. [But] we are not at the point where, globally, there is such a technological solution.” As the aim of the travel rule is to combat terror financing and money laundering in the virtual asset space, we can only push harder to ensure that the technology is developed fast enough to assist regulators to keep up the pace. However, in the same breath we can always look at new tech to help fight financial crime.

As with everything in life, you can use it for good or bad and in the case of BTC, the Organized Crime and Corruption Reporting Project (OCCRP), recently showcased the Italian Anti-Mafia Directorate’s (DIA) report which clearly depicted how the strongest and most powerful criminal syndicate in Italy, is growing more and more attuned to modern tools like cryptocurrency and the deep web. The syndicate uses cryptocurrencies such as BTC and Monero to fund their projects through the sale of synthetic drugs. The Fédération Internationale de Football Association (FIFA) is in hot-water following various reports of money being stolen by corrupt officials, totaling more than USD$201m, which was seized by the US Department of Justice (DOJ). The DOJ started its corruption probe in 2015 and has subsequently arrested and charged more than 50 individuals.


The Monetary Authority of Singapore (MAS), has issued a warning to Binance, to stop providing payment services to Singapore residents. The Internal Revenue Authority (IRS), is on the hunt for tax cheats, fraudsters, money launderers and dark web drug dealers. A sting operation is in the works on the market for trading bitcoin, ether and other cryptocurrency. The Securities and Exchange Commission (SEC) has secured an order to compel Rippel exchange to produce 1 million missing Slack messages among employees. The order was sought as part of the ongoing case against the multi-billion-dollar company for selling unregistered securities. A Venezuelan man has faked his own kidnap to steal clients’ crypto worth over USD$1m in BTC. One more exchange has reported that it has been hacked – Bilaxy exchange might have around $450 million in various cryptocurrencies stolen. The company has advised customers to refrain from sending any funds to their accounts.

Google has banned more than 8 crypto apps on its Play Store following claims that the apps were duping crypto enthusiasts by charging fees for an illegitimate cloud mining service. In New Zeeland, the Financial Markets Authority (FMA) has issued a warning to Sharesies Limited and Sharesies Nominee Limited for failing to have sufficient anti-money laundering procedures, policies, and controls in place. The failure includes failure to not retain nature and purpose of the business relationship, whether the customers are subject to EDD and onboarding customers without proper identity verification.


In New York, attorneys and doctors have been charged with defrauding businesses and insurance companies with more than USD$31 million through trip-and-fall fraud scheme, which circled around fraudulent insurance reimbursements and other compensation for fraudulent trip-and-fall accidents. The owner of JetReady, has agreed to pay USD$287,055 to settle allegations that he misappropriated Payment Protection Program (PPP) loan proceeds for his personal expenses. This is not only of concern from a misappropriation perspective but also relevant for whistleblowing pertaining to the provisions of the False Claims Act. In this case, a former JetReady employee filed a private party action on behalf of the United States and received a portion of the amount recovered, which in this case amounted to USD$57,411.

A US man has pleaded guilty for his connection to BitConnect, a cryptocurrency investment scheme, which defrauded investors from the United States and abroad of over USD$2 billion. A former Netflix engineer has pleaded guilty to insider trading. Staying with the DOJ, a Florida man was sentenced to three years in prison last week for selling counterfeited drugs on the Dark Net. In El Savator, a critic of the new BTC law was arrested without any formal warrant issued. South African authorities have arrested 7 suspects in connection with the alleged murder of whistleblower Babita Deokoran. On the extradition front, the US has handed over Eduardo Arellano Felix, a former drug cartel boss to Mexican Authorities and South Africa will extradite former Mozambique finance minister Manuel Chang to his home country, where a criminal trial over the USD$2 billion debt scandal has now begun. The Dubai Misdemeanour Court has convicted 8 people and three companies for cyber fraud and money laundering, following a plan to hack into a company’s bank account and launder stolen funds worth around USD$3.81m.


Since our last report, BTC has gained some traction and the wheels have been set in motion for standardization of regulation for the virtual asset ATM industry. There has also been reports of criminal groups using BTC and ensuing tech to facilitate criminal transactions; Google has banned 8 apps on its Play Store that were duping crypto enthusiasts by charging fees for an illegitimate cloud mining service.

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