Friday's Final Word | week 7
Good morning, everybody! Our favorite day, Friday, is here once again, it never fails to arrive, and this means that it’s time for a news update about the latest shenanigans in financial crime. Enjoy the read!
♟️ New strategy for tackling organized crime
🥊 Elizabeth Warren’s crypto bill suffers blow from Treasury
🙅♀️ Defendant pleads not guilty in $6.3 billion bitcoin laundering case
⛔️ BaFin warns Deutsche Bank of serious fines
🤖 Tackling money laundering with AI – not a choice but a necessity
📜 Making sense of FinCEN’s proposed AML bill
Tackling transnational global crime in the coming years – new report with new strategies
Organized crime “grows in the cracks of our fractured world”. It is not merely the beneficiary of interlinked threats and challenges but often the very enabler of these things. Hence, coming up with an effective global strategy should be a top priority because without a structured response fighting transnational organized crime will turn into a Whack-a-Mole game where success at best is a fleeting trophy. The Global Initiative Against Transnational Organized Crime’s latest report, called “The 2024-2026 Strategy – New Ways to Think and Act” is a study directly tackling this topic, exploring criminal markets and researching new enforcement approaches. If you are a curious soul, then I would definitely recommend scanning through it.
Download the full report here
Treasury deals blow to Elizabeth Warren’s anti-crypto crusade
The battle over how much scrutiny should be imposed on the crypto sphere is still ongoing, with both crusaders and defenders turning to bulletproof arguments to make their case. This time, it's Senator Elizabeth Warren who finds herself on the defensive after it has come to light during a House Financial Committee oversight hearing that her proposed crypto and AML bill is actually based on inflated statistics. The larger numbers regarding crypto's contribution to terrorist financing might have been an innocent misinterpretation, but it was enough for the crypto lobby to exploit and use to the detriment of the bill. However, celebrating for crypto would be premature, as this is just a small step in a longer congressional persuasion game. Let's see who will prevail.
Read full article here
Defendant pleads not guilty in $6.3 billion bitcoin laundering case unfolding in the UK
Often, when talking about money laundering, we get stuck with the idea of moving money illegally. But it’s worth remembering that it’s not the movement of money that’s illicit per se, but rather how that money was made in the first place. That’s the point where the true crime was committed, and money laundering is just a way to realize profits. In a $6.3 billion bitcoin laundering case unfolding in the UK, the defendant Jian Wen is making exactly this case, reasoning that she had no idea about the origins of the money she was moving and hiding. The court, however, is not convinced, citing evidence from her browser history about evading KYC measures and extradition procedures for criminal offenses.
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Read full article here
BaFin warns Deutsche Bank of potential fines if AML controls are not fixed
BaFin, the Federal Financial Supervisory Authority of Germany, first instated a special representative at Deutsche Bank back in 2018 to assess the progress of the bank’s implementation of safeguards against money laundering and terrorist financing. 6 years later, in 2024, the regulator is still unconvinced about the progress Deutsche Bank has made, so the representative’s stay got extended until 30 October 2024. If this period isn’t enough for the bank to fulfill requirements and improve its AML/TF practices, then the regulator will have to impose penalties. This comes amid a €2.5 billion cost-cutting drive that raises questions about the bank’s ability to significantly improve its current techniques.
Read full article here
Threat report highlighting AI as the “only answer” to AML challenges
There has been a lot of talk about AI's improved capabilities lately, and often the reports would steer towards the negatives, highlighting the dangers and threats which GenAI could potentially unleash on society. But it would be mistaken to think that AI only means challenges; after all, the technology does come with alluring promises. In a new threat report, the Association of Certified Anti-Money Laundering Specialists (ACAMS) states that the very challenge of fighting illicit finance effectively stems from the slow deployment of AI technology. Insiders would blame regulators, saying that legacy systems must still be maintained instead of allowing entire processes to be automated. However, according to the report, this switch to technology is especially needed in these years when amidst budget cuts and increased scrutiny, more has to be achieved with fewer resources.
Read full article here
Delving into the implications of the Treasury’s new AML rule proposal
Last week, we already mentioned that a new AML bill was in the making in the USA, and now it’s time to delve into what it will actually entail. If completed, the proposed bill would bring investment advisors under the Bank Secrecy Act, requiring them to implement risk-based AML/CFT programs and report suspicious financial activity. The reasoning behind such an extension is that investment advisors play a key role in channeling foreign funds into the American financial sphere, and therefore they work as crucial gatekeepers who should be uniquely careful about what and how money is coming in. Currently, the proposed bill is in a consultation phase, but if finalized, advisors will have 12 months to adopt enhanced AML practices.
Read full article here
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