perpetual kyc

Improving Identity Verification Processes Through Perpetual KYC – How Shufti Pro Helps the Banking Sector

Banks are considered a subset of the financial services industry and play the most crucial role in global economies. Banks mobilize the deposits from households and spread them across the countries, making the funds available for investments. Due to the high influx of money into this sector, criminals have started exploiting the loopholes resulting in several crimes, particularly identity theft, money laundering, and terrorist financing. It is quite crucial for all financial institutions particularly banks to implement a robust system of customer verification to counter prevailing scams.

In US alone, illicit bank transfers or payment fraud resulted in financial losses amounting to $756 million in 2021. Although the whole banking sector has implemented stringent measures to curb financial scams, they are still common, and the overall rate is increasing every year. It has become mandatory for banking organizations to evolve the contemporary Know Your Verification (KYC) measures and implement them in an advanced way to counter the sophisticated techniques of criminals. Perpetual KYC, commonly known as P-KYC, is one of the effective solutions that has the capacity to revolutionize banks’ scrutiny systems and execute customer verification through a modern approach.

An Overview of Perpetual KYC

All financial organizations like banks, insurance companies, and crypto exchanges use a variety of KYC measures to verify the true identities of their users. It is generally performed in order to understand who the business is interacting with. The majority of digital businesses generally verify their client and customers at the start of business while keeping a record of their personal details like name, ID number, social security, address, etc. Perpetual KYC takes this further by introducing a process that keeps on verifying customers continuously, monitors their transactions, and puts different strategies in place to report any suspicious activity.

Perpetual KYC just differs from regular KYC in the way that it keeps on regulating the users’ data and serves its purposes in a more advanced way. All the financial companies in search of better security, improved transparency, and secure customer relationships are using P-KYC. It is not only beneficial for digital businesses but also ensures the safety of users’ identities and assets. In this way, financial service providers can react to any suspicious activity quickly and take strict action to halt it.

The Need for Perpetual KYC in Banking Sector

The banking sector is thought to be the backbone of any country’s economy, and due to rising crime cases, it is in dire need of an effective and constant customer due diligence system. It is estimated that the market capitalization of the global banking sector was 7.3 trillion euros in the second quarter of 2022, which highlights the importance of perpetual KYC. The banks have billion of customers globally and due to rising cases of money laundering and terrorist financing, it has become mandatory to keep a strict check on all the transactions.

In traditional KYC checks, illegal activities of criminals can go unnoticed for years resulting in a lot of financial damage. On the other hand, perpetual KYC measures are efficient enough to track illicit activities in real time and inform the authorities about them. Implementing P-KYC measures can help the banks improve customer relationships by providing them with security from several scams including account takeovers, identity theft, and other financial losses. It will also help the banking organizations to comply with the local and global KYC regulations by countering money launderers and terrorist financiers.

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Recent Crime Cases in the Banking Industry

The banking sector has always remained a prime target of financial criminals due to its exposure to huge investments and funds. Criminals use a variety of advanced techniques to carry out money laundering inflicting a myriad of damages on the overall economic system. Several cases have been witnessed in the recent past where criminals were charged with committing bank fraud.

Criminal Gang in US Charged with Bank Fraud and Money Laundering

US law enforcement authorities recently arrested a gang of 11 members who were involved in bank fraud and money laundering. All the criminals have been charged in court, and investigations have found that they were involved in payment fraud of more than $9 million, which was sent to other countries through money laundering. The scammers were using fake identities of 50 different users to commit fraud. Court has ordered to carry on the investigations and found more transactions related to the case.

Two Former Employees of Major Bank Charged with Loan Fraud

The Police arrested two former employees who were found to be involved in defrauding the major bank with millions of dollars in federal loan funds. The criminals used wire fraud techniques to obtain loans of more than $3 million from the Paycheck Protection Program (PPP) and Coronavirus aid. A judge ordered the Police to move further with the investigation and decide the penalties for the culprits.

Global Regulatory Authorities Monitoring the Banking Sector

All the global regulatory authorities, including Financial Action Task Force (FATF), European Union (EU), and Interpol, have highlighted the vulnerabilities of the banking sector to financial crimes. FATF has issued detailed guidelines for implementing effective KYC solutions to counter money launderers and scammers.

US

The Financial Crimes Enforcement Network (FinCEN) is the primary body that monitors prevailing suspicious activities in the banking sector. It is working under the guidelines of the Bank Secrecy Act (BSA) which makes it crucial for banks to keep a strict check on their customers and verify their true identities. BSA has also highlighted the need for a system that keeps continuous checks on all financial transactions and reports to law enforcement authorities in case of any violation.

UK

The Fraud Act 2006 is the primary legislation in the UK which permits all banks to verify the true identities of their users and keep a record of all details. This act also suggests punishment for criminals involved in bank fraud which could go up to 10 years of imprisonment and hefty fines. In the recent past, UK law enforcement agencies have convicted a large number of criminals under this act and put them behind bars.

Securing Banking Organizations Through Perpetual KYC

With rapid digitization, the use of digital banking has increased, posing considerable threats of identity theft and financial scams. By using fake identities, criminals onboard the system and exploit loopholes resulting in money laundering and terrorist financing. Although traditional KYC checks are quite effective against fraud, they are not efficient enough to trace all suspicious activities by scammers. Perpetual KYC is a viable option for banking organizations to keep a continuous check on all of their users while monitoring financial transactions and reporting to relevant agencies in case of any fraudulent activity. Through perpetual KYC checks, banks will not only be able to curb identity theft but will also help in securing the business-customer relationship.

What Shufti Pro Offers?

Shufti Pro offers state-of-the-art identity verification services that can help the banking sector to counter criminals and comply with global regulations as well. The perpetual KYC services offered by Shufti Pro will help the banks strictly check all customers’ activities and monitor their transactions in real time. Powered by thousands of AI algorithms, it is efficient enough to generate output in less than a second with 98.67% accuracy.

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Enhancing the Effectiveness of KYC Checks with Shufti Pro’s Forensic Document Verification

With emerging technologies and rapid digitization, identity fraud has become quite common, raising the concerns of several financial crimes including money laundering and terrorist financing. All online businesses and service providers authenticate the identities of their customers through documents like ID cards, driving licenses, and social security. Users have to input all their confidential details while using any digital service, putting them at high risk of cybercrime. The criminals use fake and forged documents to onboard the system and get involved in a large number of scams raising threats of identity theft.

In the US alone, the FTC received 5.9 million reports of fraud in 2021, out of which 25% were for identity fraud. The whole digital sector, especially financial institutions, faces huge threats in the form of identity fraud. Scammers steal the information of users and abuse them for different fraudulent activities, particularly fake account opening and debit/credit card scams. Implementing a robust system of forensic document authentication is imperative for online businesses to secure the confidential data of their users and prevent financial crimes.

Forensic Document Examination – An Overview

Although all financial institutions like banks, insurance companies, crypto exchanges, and e-commerce have stringent measures to curb document fraud, criminals are using more sophisticated ways which require modern solutions. The traditional methods of record verification are not serving the purpose as the cases of identity theft of increasing every year. The whole system is in dire need of an advanced document authentication process which could be through the use of forensics. The solution that incorporates scientific principles to verify documents is forensic document examination, and it involves various modern techniques that can confirm the record’s authenticity. There are experts in forensics who work in dedicated laboratories to counter fraudulent activities. Currently, the trend of using forensic techniques for document examination is rising, and many courts only accept forensically approved records.

The Financial Action Task Force (FATF) has also highlighted the need to curb identity theft as criminals use stolen details of users to carry out money laundering and terrorist financing. It is estimated that online businesses are spending an average of 21% of their IT budget on cybersecurity, but still, criminal activities are prevailing costing billion of dollars as financial losses. Incorporating forensic document authentication techniques like infrared imaging, photography, and handwriting verification can really help digital businesses to curb identity fraud, ensuring security for their users.

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High Profile Crime Cases Involving Document Forgery

All countries across the globe are facing extreme threats in the form of identity theft and financial scams. Although jurisdictions are implementing stringent regulations, the crime ratio is going upwards, compelling authorities and businesses to opt for forensic document examination systems. In the recent past, several cases have surfaced across the globe where criminals tried to defraud different departments, particularly educational institutions, immigration, and banks, through forged documents.

Large-Scale Document Forgery Case Cracked in Germany and Greece

In July this year, German law enforcement authorities, along with Europol, carried out a huge raid in Germany and Greece, arresting a gang involved in a large-scale document forgery. Police raided 12 different houses in both countries and confiscated a large number of forged documents, including passports, ID cards, and driving licenses. It has been found in the investigation that criminals were involved in illegal immigration scams and helping people from different countries to come to Europe through fake records. Police have stated that many criminals belonging to the gang are yet to be arrested and investigations are still going on to trace more illegal activities.

Finland Detects a High Number of Fake Travel Documents

The Finnish Border Guard has revealed in the latest press conference that they have detected a large number of forged documents used by the immigrants. It has also been stated that criminals are using high-quality forgery techniques to make false documents and then using those records for immigration purposes. Finland law enforcement agencies have initiated a high-level inquiry against a group allegedly considered to be involved in the scam.

Regulatory Authorities Monitoring Document Scams

Document fraud has posed a major threat to all financial institutions, which has convinced the major jurisdictions to legislate stringent laws against scams. Global organizations, particularly FATF, European Union (EU), and Interpol, have also highlighted the need for an effective framework to counter cyber criminals through effective document authentication checks. In the wake of this, several countries have implemented laws that are helping online businesses to monitor verification operations.

Germany

Germany is one of the countries which have quite strict policies toward document forgery and individuals involved in this illegal activity. The production of a false record or falsification of any genuine document is a criminal offense as per German law, which is punishable by a fine or imprisonment of up to five years. Code 267 of German criminal law is quite clear about document fraud and even any attempt to forge the details is considered an offense. Several criminals have been tried under this law and put behind bars for violating rules and regulations.

France

France has also legislated strict laws against document forgery which is the reason that identity fraud cases are quite less here compared to other European countries. The mere possession of a single false document in France can cost the criminals two years of imprisonment and a €30,000 fine. In case the nature of the crime is worse, this penalty can go up to 5 years with €75,000 fine. Besides this, the perpetrators also risk several sanctions imposed on them, which may include freezing their bank accounts and restricting them from using online services.

Enhancing KYC Using Forensic Document Examination

Documents are the most important source of determining the true identities of users and without any effective system of verification, it will remain hard to counter the criminals. With growing digitization, online businesses are picking up the pace raising the need for forensic document examination systems to secure financial transactions. Through forensic authentication of documents, not only can criminals be identified, but sophisticated users can also be saved from financial losses.

The global regulatory authorities are also highlighting the need for viable Know Your Customer (KYC) measures that can be enhanced by incorporating the techniques of forensic examination of documents. It will allow the online service providers to check the legitimacy of users’ records using advanced methods and will also help to keep the bad actors away. The criminals are using sophisticated ways to cheat the system and it is the need of the hour to fight them through the most effective methods which could be forensics verification.

What Shufti Pro Offers?

Shufti Pro is offering the most advanced identity verification services, which authenticate the documents of customers using forensic techniques and Optimal Character Recognition (OCR), helping businesses securely onboard clients. Combating identity theft and other financial crimes is quite crucial for online service providers and by using Shufti Pro’s state-of-the-art identity verification services, they can ensure compliance with global standards. Powered by thousands of AI algorithms, Shufti Pro’s KYC solution will verify the true identities of users and provide output in less than a second with 98.67% accuracy.

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Identity Fraud in Coworking Spaces – How Shufti Pro’s Facial Biometric Authentication Helps

With more and more companies embracing remote work, the trend of coworking spaces is picking pace. Instead of working hard at home with limited facilities, employees get the opportunity to improve their communication and social skills while sitting in a coworking space having all the equipment. Not only the remote workers but many other sectors particularly real estate, and telecommunication have got a feasible option for investment and business. This latest model of business has altogether revolutionized the whole employment structure and the concept is growing around the globe.

In the US alone, the number of coworking spaces in five years, from 2017 to 2022, has increased by 55%. Although benefiting businesses a lot, shared workspaces have also raised the risks of several scams, particularly identity theft and privacy breaches, further leading to financial fraud. It is estimated by experts that the coworking concept will be highly adopted in the coming years which makes it crucial for service providers to implement stringent identity verification services, curbing cybercrime.

The Rising Need for Coworking Spaces – An Overview

The first coworking space was established in San Fransisco in 2005 after which the concept spread to the whole world gradually. Especially during the COVID-19 pandemic, when companies had to close their on-site operations, the use of the coworking format increased substantially. A large number of surveys show that after the pandemic, a large number of workers preferred to avoid full-time office routines and even work from home, which eventually created the space for coworking setup. It is estimated that 5 million people will be working in shared spaces by 2024 – an increase of 58% compared to the current numbers.

Another crucial factor that contributed to the rising number of coworking spaces is the freelancing style of working. A large number of businesses around the globe do not have any offices; instead they hire their employees through various online platforms like Fiverr, Upwork, Freelancer, and many others. The majority of freelance workers prefer to work in coworking spaces rather than completing their projects while sitting in their homes. It is estimated that freelancers will be 50% workforce by 2025 which will eventually raise the need for more shared spaces.

Elevating Cybercrime in Coworking Spaces

Although coworking spaces are providing viable opportunities to workers, it has also encouraged cyber criminals to exploit loopholes and get involved in a myriad of scams, particularly identity theft and data breaches. Unlike financial institutions, shared spaces have not implemented stringent identity verification measures which have made them highly vulnerable to scammers. While sharing the same space, internet, computers, and other equipment, users unintentionally end up sharing sensitive personal and professional information. So it has become mandatory for coworking service providers to ensure the security of users’ data by implementing stringent solutions.

While working in a traditional job environment, all the employees know each other, but in a coworking environment, users do not have information about other people sharing the same facilities. The fraudsters can hack and steal the details of users logging in on the same devices through multiple fraud techniques, which could further result in account takeovers and identity theft.

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Identity Theft – A Huge Challenge

With emerging technologies and growing digitization, identity theft has become one of the prominent issues in online businesses. In the US alone, 15 million people had their identities stolen in 2021, raising concerns for global regulatory authorities to find a solution to this menace. In the same way, coworking spaces are also posed to high risks of privacy breaches due to usage of the same wifi and other equipment. With the growing use of shared spaces, owners and developers will have to find a robust identity verification solution that can counter advanced techniques used by criminals. The most feasible solution for identity theft is presented in the form of Know Your Customer (KYC) measures which may include facial recognition, document verification, and thumb impressions.

Why Co-working Spaces Need Identity Verification Services?

The increasing trend of remote working and freelancing is compelling workers to use shared workspaces. Users have to input their confidential details while logging in, which leaves them vulnerable to several threats, particularly identity theft and privacy breaches. In order to counter criminals and make co-working spaces secure platforms, it is the need of the hour to find and implement identity verification services that can authenticate the true identities of users and report suspicious activities. Implementation of such an effective system will not only help the businesses to grow in a secure environment but also ensure a good reputation for co-working spaces.

Types of IDV Services for Coworking Spaces

There are myriad types of identity verification services that can help co-working service providers to know the true identities of their users and identify the criminals in case of any suspicious activity.

Facial Biometric Authentication

Facial recognition is the most authentic process of verifying users, which can authenticate their identities in real time. It provides the service providers

with the most secure and fastest selfie-based onboarding method where they can approve the entry of users after successful facial recognition.

Video KYC

All the documents of users including identity cards, licenses, and other details can be verified through the video feature of KYC. In order to use video KYC, users have to switch on their devices’ cameras and show proof of their identities. The verification system checks the details and compares them with the ones in records to allow/deny entry to users.

Ensuring KYC Compliance in Coworking Spaces

It is a well-established fact that all the digital businesses which incorporated strict identity verification measures, get successful in lowering the number of crimes. Similarly, the advanced KYC techniques can also help the coworking service providers ensure security on their platforms. A system efficient enough to verify the true identities of users through real-time biometric verifications and document authentication can really help business owners to counter criminal activities. The Customer Due Diligence (CDD) approach is also mandatory, which will help to authenticate every user and keep a record of their activities on the platform.

How Shufti Pro Can Help

Combating crimes, particularly identity theft and privacy breaches, is crucial for co-working spaces. It is a fact to understand that usage of co-working services will increase in the coming years, and it is the most feasible time for business owners to invest in IDV services for the platforms. Although protecting the workers from cybercrime looks like a difficult task, it can be accomplished using efficient KYC solutions.

Shufti Pro’s state-of-the-art identity verification services are the most viable solution for co-working spaces. By implementing facial recognition and document authentication services, businesses can comply with the global standards of KYC. Shufti Pro’s KYC solutions are efficient enough to verify true identities in less than a second with 98.67% accuracy.

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NFT Trading and Money Laundering – How Shufti Pro’s AML Screening Helps Combat Financial Crimes

With revolutionary technologies and growing digitization, the digital version of artworks known as Non-Fungible Tokens (NFTs) has emerged. In the past, wealthy business tycoons used to make expensive purchases of art and antiquities and they are now preferring to engage in virtual assets. NFTs have created a whole new trend of buying and selling digital creations, which is picking up the pace, and it is estimated that its market cap could touch $80 billion by 2025. NFTs are blockchain cryptographic assets with unique identification codes that distinguish them from each other, and unlike cryptocurrency, they cannot be traded at an equal level.

With all the investments and business opportunities in the NFT market, it is also associated with high risks of money laundering and other financial crimes. Unlike the financial sector, particularly banks and insurance companies, the NFT market doesn’t have strict Anti-Money Laundering (AML) regulations which have made it a safe haven for scammers. It is a well-established fact that NFTs are here to stay, and it is the need of the hour to develop a comprehensive framework for this sector, curbing money laundering and terrorist financing.

Rising Risks of Money Laundering in the NFT Market

Since the beginning of the advanced financial system, money laundering has remained a serious concern for law enforcement authorities. Criminals use a variety of sophisticated techniques to manipulate the system converting their illicit money into legal assets. NFTs have been around for more than a decade but no considerable actions have been taken yet to halt the abuse of these digital tokens leading to financial crimes, mainly money laundering and terrorist financing. The sale and purchase of NFTs mainly involve the use of cryptocurrencies, and the decentralized nature of the crypto market has made it difficult for regulatory agencies to halt crimes.

In just one year, from July 2021 to July 2022, more than $100 million in NFTs have been stolen through various scams. The volatile prices of NFTs have made them attractive for money laundering purposes where scammers induce illicit money, particularly from drug business or human trafficking, into the pool and hide it by making purchases of digital tokens. The global regulatory authorities, mainly Financial Action Task Force (FATF), Interpol, and European Union (EU), have highlighted the risks of money laundering through digital assets and instructed all member-states to legislate laws eliminating the chances of monetary crimes.

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High-Profile Crime Cases in the NFT Market

There was a time when only wealthy business tycoons and corrupt politicians were involved in money laundering, but now individuals and gangs on smaller levels are using fraudulent techniques to disguise their illicit earnings. Several cases of money laundering through NFTs have surfaced in the recent past, and all the major jurisdictions are taking strict action to bring criminals under the law.

Two Defendants Charged In NFT Fraud And Money Laundering Scheme

Law enforcement authorities in the US have arrested two criminals involved in wire fraud and money laundering in connection with a million-dollar fraudulent NFT scheme. The investigations have found that scammers were convincing users to invest in digital assets and promising them high profits. In this way, they managed to generate a profit of $1.5 million which they were laundering to other countries by investing in cryptocurrencies. The criminals have been charged in the fraud scandal, and the court is yet to decide their penalties.

HMRC UK Seizes NFTs in £1.4m Fraud Case

UK tax authority, HM Revenue and Customs (HMRC), arrested three people who were hiding drug money of £1.4 million using NFT purchases. The Police have further revealed that criminals were using sophisticated methods like stolen identities, false addresses, unregistered mobile phones, and fake invoices to disguise their original identities. HRMC stated that it had seized three digital artwork NFTs which were being used for illegal investments. The investigations are still going on to track down more fraudulent transactions involved in the case.

Global Regulatory Authorities Monitoring Money Laundering Through NFTs

Due to the rising number of financial crimes using cryptocurrencies and NFTs, global regulatory authorities are working to form a joint framework to mitigate the risks of money laundering and terrorist financing. In the wake of this, the majority of the countries are legislating strict Anti-Money Laundering (AML) laws to regulate the NFT market.

US

The Financial Crimes Enforcement Network (FinCEN) is the primary authoritative body in US monitoring money laundering and terrorist financing. FinCEN has issued a detailed report highlighting the vulnerabilities of NFTs to financial crimes. The report has also mentioned that ease of transportability across international borders and accepted use of third parties to purchase and sell digital assets have helped criminals stay anonymous. FinCEN has instructed all the NFT platforms to implement strict Know Your Customer (KYC) and AML regulations halting criminal activities.

Canada

The Canadian Securities Administrators (CSA) has issued a notice to all the NFT platforms to ensure strict scrutiny of their users while onboarding. Although Canada is yet to legislate laws against money laundering in the NFT market, it is treating the cases under the other laws related to financial crimes. CSA has also highlighted the need for dedicated NFT laws to regulate the whole industry and curb monetary scams.

Australia

Australia is one of the countries that is taking strict action against prevailing crimes through NFTs and cryptocurrency. Australian Transaction Reports and Analysis Centre (AUSTRAC) has termed non-fungible tokes as a source of emerging financial crimes and asked lawmakers to legislate strict laws to monitor this sector. Moreover, Australian Federal Police (AFP) has formed a dedicated unit to tackle money laundering through NFTs and cryptocurrency, which has recently busted a large number of criminal networks.

Eradicating Money Laundering in NFT Market Through AML Compliance

Since 9/11, all the global financial watchdogs have highlighted the need for strict anti-money laundering measures in the financial sector due to the rising risks of terrorist financing. Although NFTs are new in the digital market, they have a good potential for investment and business. In recent years, several billion-dollar deals of digital tokens have surfaced, encouraging the wealthy elite to invest here and make profits. Due to the decentralized nature of NFTs, it has become mandatory for all key stakeholders, particularly global organizations and NFT suppliers, to incorporate anti-money laundering measures. FATF, EU, and Interpol have accumulated vast data of financial criminals in the form of sanctions lists which must be consulted while onboarding investors on the platform. Ensuring strict AML compliance can certainly reduce the rising crime ratio in the NFT market and secure investments of sophisticated users.

What Shufti Pro Offers?

Eradicating financial crimes, particularly terrorist financing and money laundering, is crucial for the NFT market. The use of digital tokens is rising globally, and it is the right time for companies to invest in AML and KYC solutions to ensure the security of their users.

Shufti Pro’s state-of-the-art AML screening solution has access to 1700+ sanctions lists and screens data against them while countering criminals. Powered by thousands of AI algorithms, Shufti Pro’s AML solution is efficient enough to generate output in less than a second with 98.67% accuracy.

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Prevailing Crimes in Identity Verification – How Shufti Pro’s Forensic Document Verification Can Help

Identity fraud has become quite prevalent in digital businesses which is not only affecting operations but also raising concerns about money laundering and other financial crimes. While using any online service, users have to input their confidential details mainly name, ID number, address, and social security which elevates the risks of cybercrime. On the other hand, it has also become a huge challenge for digital service providers to verify all their customers and keep their information secure. The criminals use a variety of sophisticated techniques, particularly document forgery to disguise their identities and get involved in financial crimes.

Although all digital businesses are working tirelessly to eliminate the chances of document fraud, it is still prevalent and numbers are rising every year. In the US alone, there was a 68% increase in the cases of data compromises compared to the previous year with insurance companies as the main target of scammers. Documents are the most crucial sources of verifying the identities of users and it is important for online service providers to implement an advanced system of record checkings like Optical Character Recognition (OCR) and forensic document authentication.

Forensic Document Verification – A New Standard

The emerging technologies have not only helped businesses to secure their operations but also encouraged fraudsters to use more advanced techniques of exploiting loopholes in systems. The majority of digital service providers like Payoneer, Paypal, Amazon, Walmart, and many others have implemented stringent regulations to verify the documents of their users but traditional methods are not serving the purpose of authenticating the true identities of customers. In the UK alone, consumers lost £1.3 billion in 2021 which is 27% more compared to the previous year. Undoubtedly, it can be established that prevailing document verification measures are not efficient enough to curb sophisticated fraud methods used by criminals. The whole system is in dire need of forensic authentication which is more advanced and has all capacity to counter scammers.

All the digital service providers particularly financial companies, educational institutions, and immigration departments are at high risk of document fraud. The criminals use forged documents to claim funds, admissions to universities, or entry to foreign countries. By implementing standards of forensic forgery detection, all online businesses can secure their onboarding system with very less risks of scams. The forensic authentication of documents involves scientific techniques to verify the identities of users leaving no room for criminals.

How Forensic Document Verification is Carried Out?

Forensic document verification involves incorporation of scientific rules in examining the authenticity of records. There are experts in this field who carry out all the operations using specialized methods. Nowadays, the use of forensics is rising, especially in courts where no document is accepted without authentication. By using several techniques like handwriting identification, ultraviolet light sources, microscopes, photography, and infrared imaging in the laboratories, a document is verified. All the major jurisdictions have formed dedicated institutions which overlook the process of document verification. The American Board of Forensic Document Examiners (ABFDE) is the primary authoritative body responsible for monitoring forensic operations in the US, and any person carrying out these activities anywhere in the country must be a member of this board.

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High-Profile Crime Cases of Document Fraud

The prevailing traditional methods of document verification have encouraged criminals to exploit loopholes in systems inflicting financial losses on users. In the recent past, several cases have surfaced where scammers try to manipulate documents resulting in credit card fraud, illegal immigration, fake admissions to international universities, and many others. Let’s have a look at some of the high-profile cases of document fraud in different countries.

Gang Arrested for Printing Fake Documents in Greece

European Police conducted a raid this year dismantling a criminal network involved in forgery and dissemination of counterfeit documents. The gang was using fake identities and helping people to apply for immigration in several European countries. The Police have seized 362 forged documents including ID cards, residence permits, passports, and asylum papers which were used in carrying out illicit activities. The law enforcement authorities have stated that criminals had support from other countries and investigations are still going on to catch all culprits.

Criminal Network Busted for Distributing Fake Documents

French law enforcement agencies along with Spanish Police cracked down on a gang that was involved in the distribution of forged ID and travel documents in several countries including France, Germany, Italy, and Spain. The raid resulted in 17 arrests and the seizure of a large number of fake identity records. It has further been stated by Police that criminals were involved in the smuggling of migrants to the US, UK, and Ireland while carrying out drug trafficking as well. The investigative authorities are still working to find more proof against criminals to penalize them as per law.

Regulatory Authorities Monitoring Document Fraud

The Financial Action Task Force (FATF), the primary body working against money laundering, has also highlighted the importance of effective document verification measures in curbing monetary crimes. In the wake of this, several countries across the globe have legislated and implemented stringent solutions to verify the true identities of users while onboarding.

Canada

Canada is among those countries that have pretty rigid approaches toward document fraud. Section 366, 367, and 368 of the Criminal Code of Canada terms record forgery as a criminal offense. The maximum penalty for this crime is 14 years imprisonment including heft fines. The law-enforcement authorities in Canada have charged several criminals under this act and set an example for fraudsters.

Australia

Section 83A of Crimes Act Australia states “A person must not make a false document with the intention that he or she, or another person, shall use it to induce another person to accept it as genuine, and by reason of so accepting it to do or not to do some act to that other person’s, or to another person’s prejudice.” The maximum penalty for any crime related to document forgery is 10 years imprisonment which can vary depending on the nature of crime.

Document Forgery Forensic Authentication – Ensuring KYC Compliance

Documents are considered the foremost source of verifying the identity of any person. Any type of fraud related to official records can inflict serious consequences on individuals and businesses. It is crucial for online service providers to implement stringent measures to ensure Know Your Customer (KYC) compliance for their users. By implementing document forensic technology, the legitimacy of documents can be checked using advanced ways of securing digital businesses. It will not only help in countering criminals but also ensure global compliance.

What Shufti Pro Offers?

Shufti Pro’s state-of-the-art identity verification services can help online businesses implement a robust solution against document fraud. Combating financial crimes through efficient record authentication will secure the identities of users and ensure compliance with global regulatory standards. Powered by thousands of AI algorithms Shufti Pro’s KYC solution uses advanced techniques like OCR and forensic document examination to verify documents in real-time. It generates output in less than a second with 98.67% accuracy.

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Evolving Regulations Shaping Digital Crypto Ecosystem – How Shufti Pro Can Help

Since the start of civilization, humans have used money in several different ways, and throughout history, both usage and form of currency have evolved. Crypto is the most innovative form of e-currency with a huge potential for investment and business. Huge demand in the crypto market and the expansion of the industry brought with it the necessity of regulations. Although cryptocurrency does not have strict measures as fiat currencies, global financial organizations are working tirelessly to form a comprehensive framework for monitoring this crucial sector.

In 2021, the global cryptocurrency market size reached $1782 billion, with an expectancy to rise at an annual rate of 58% by 2027. Unlike banks and other financial companies, the crypto industry has not implemented stringent regulations to curb monetary fraud, which has helped criminals to exploit loopholes and get involved in different scams. The bad actors are using more sophisticated ways to carry out crimes, particularly money laundering and terrorist financing, making it mandatory for regulatory authorities to implement strict screening measures.

Insight into Cryptocurrency Industry [2022 Overview]

In a few years, cryptocurrency has gained huge popularity among investors due to its decentralized nature and absence of any third party in transactions. Although the first half of 2022 went really bad for the crypto market due to high devaluation, it is expected to rise again within a year. Bitcoin and Ethereum which are the most popular cryptocurrencies are down by more than 50% compared to their worth in 2021. Despite the falling prices, investors’ interest in crypto remains high, and people are still putting money in the market to gain profits in the near future.

The overall cryptocurrency market has fallen below $1 trillion in 2022 but experts are just terming it as an industry evolution. One of the reasons behind the devaluation of cryptocurrency is thought to be the lack of strict monetary regulations and its vulnerability to financial crimes. Due to rising cases of monetary scams, a large number of investors sell their digital assets resulting in the sudden depreciation of cryptocurrencies. In the wake of this, all major jurisdictions are legislating laws to monitor the crypto market, and experts are predicting that strict regulations will ensure more stability in the volatile cryptocurrency industry.

Prevailing Risks of Money Laundering in the Crypto industry

Due to lack of stringent regulations, cryptocurrencies have made it easier for criminals to invest their illicit money in different coins or tokens making it hard to trace. In 2021 alone, $8.6 billion was laundered using crypto firms which were 30% more than the previous year. The Financial Action Task Force (FATF); a global authority monitoring money laundering, has also highlighted the risks of financial crimes through crypto firms. FATF has issued a set of red flag indicators and made it mandatory for all countries to enhance Know Your Customer (KYC) and Anti-Money Laundering (AML) measures.

Currently, a large number of online businesses like Tesla and Microsoft are accepting cryptocurrencies as payments, which has further raised the risks of money laundering. The criminals are now making luxury purchases through cryptocurrency using illicit funds and law-enforcement authorities remain unable to track transactions due to absence of Anti-Money Laundering (AML) measures. Considering the escalating crimes through crypto exchanges, it has become mandatory for all firms to implement a robust solution to counter criminals and report suspicious activities.

Crime Cases Involving Crypto Money Laundering

With transforming technologies, criminals are using advanced techniques to carry out financial scams. Not only the crypto exchanges but investors are also at high stakes of monetary losses as fraudsters are exploiting loopholes to steal identities of users. Let’s have a look at some of the high-profile cases related to money laundering through cryptocurrency.

Crypto Criminals Laundered $540 Million in the US

US law-enforcement authorities have identified a network of criminals who were involved in money laundering using a crypto service, RenBridge. The fraudsters have been laundering crime-related cash to other countries since 2022, and during this time, they managed to launder $540 million out of the US. The investigations have found that scammers took advantage of the decentralized nature of cryptocurrencies and converted illicit cash to legal assets without leaving any trail. Police have highlighted the need for effective AML measures to counter fraudsters and help officials track down culprits.

UK Police Seized $160 Million in Crypto Money Laundering Investigation

British detectives have seized $160 million worth of illicit crypto coins in an ongoing money laundering raid. Police have termed it one of the largest seizures of crypto assets in the country. The investigations have found that criminals were investing drug money into crypto exchanges and then getting amounts withdrawn in different countries.

Changing Landscape of Global Cryptocurrency Regulations

Due to increasing threat of money laundering and terrorist financing, all the major jurisdictions are legislating and adopting strict laws against cryptocurrency crimes. FATF has also taken firm steps to form a framework and guide all the member-states to ensure compliance with them.

Asia

Asia has the biggest digital economies, and several countries of the continent have not implemented robust measures to curb crypto crimes. In recent times, China has taken a hostile stance towards cryptocurrencies banning all exchanges. The authorities have termed that the crypto sector is exposed to huge threats of money laundering due to which they cannot let it operate in their country.

Moreover, other economies in the region, particularly South Korea and Thailand, have also stressed the need for efficient Know Your Customer (KYC) and AML checks to track all users’ financial transactions.

Europe

European officials have recently signed a landmark agreement that will be the first regulatory regime for the crypto industry. The meeting was held in Brussels by EU authorities along with all member states, and it has been decided to enforce strict AML measures restricting financial criminals. A separate institution, Markets in Crypto-Assets (MiCA), has also been formulated, which will be responsible for monitoring all the crypto exchanges in European countries along with taking strict action against fraudsters.

North America

Financial Transactions and Reports Analysis Centre (FINTRAC) is the primary authoritative body monitoring all the crypto transactions within and out of the country. FINTRAC has updated the KYC regulations and advised all crypto firms to incorporate a system of identity verification while keeping records of all users.

While in the US, crypto exchanges are legal and monitored under the Bank Secrecy Act (BSA). Financial Crimes Enforcement Network (FinCEN) is the organization that enforces and monitors all crypto transactions while countering criminals. In the recent past, it has brought a large number of criminals under the law through crackdowns and raids.

How Shufti Pro Can Help

Combating financial crimes, particularly money laundering and terrorist financing in crypto industry, has become mandatory to ensure transparency. Cryptocurrency is here to stay, and it is the right time for companies to invest in Know Your Customer (KYC) and Anti-Money Laundering (AML) solutions.

Shufti Pro’s state-of-the-art KYC and AML services are efficient enough to help crypto firms comply with global regulatory standards. Powered by thousands of AI algorithms, it has access to 1700+ global sanctions lists and screens data against them to identify criminals. Shufti Pro’s KYC and AML solutions generate results with 98.67% accuracy in less than a second.

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Fighting Deepfakes with Fool-Proofed Identity Verification Systems: How Shufti Pro Can Help

Undoubtedly, 21st century is the most innovative time period in human history. With every passing day, new inventions and technologies are surfacing, creating more opportunities for businesses to thrive in a high-paced environment. Deepfake is one of the innovations that gained popularity back in 2017 due to its usage in making fake videos. In simple terms, deepfakes are created using Artificial Intelligence (AI) by feeding real images into the system trained in two parts – one which creates fake images and the other which makes sure there is no difference between original and false.

One of the most famous cases of using deepfake technology was observed during shooting of movie “Furious 7” when “Paul Walker,” the man in leading role, died before completion. Directors using deepfake technology cast Paul’s brother, who completed the final scenes and surprised the audience with his extreme familiarity to original character. Deepfake technology was initially used for entertainment purposes, but now it has broadened its scope, and criminals are abusing it, inflicting financial damage on online businesses.

The Looming Threats of Deepfakes to Financial Industry

All financial organizations, including banks and insurance companies, are on high alert due to the threats posed by deepfake technology. The criminals impersonate the identities of business owners and executives to facilitate fraud resulting in financial losses to companies. There was a time when only the expert forger could create realistic fake media, but now everyone is capable of doing this using various smartphone apps. Most digital financial businesses rely on biometric authentication for their security, particularly thumb impression, facial recognition, and voice authentication. The deepfake technology can create realistic-looking identities that can easily bypass companies’ authentication checks, leading to several crimes, mainly identity theft, payment fraud, and account takeovers.

The criminals use stolen information to create synthetic identities combining fake and true identities, further presenting themselves as CEO or key member of company.  Using deep-faked images, audio, and videos, they successfully access the database of businesses further executing monetary crimes. All these scams not only result in financial losses to businesses but several instances have been observed in the recent past where scammers try to defame companies’ or CEOs’ names using different deepfake techniques. All financial organizations must implement stringent biometric authentication measures to identify criminals and restrict fraudulent activities.

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Deepfake Technology and Effects on Financial Sector

Although AI has eased a lot of operations, experts are predicting that deepfake can pose serious threats to individuals and businesses. There are a variety of smartphone apps, mainly Faceapp and Wombo which have made deepfake technology accessible to every internet user. Let’s have a look at some of the major cybercrimes which are becoming popular due to abuse of deepfake.

Identity Theft

Identity theft is one of the cybercrimes which have raised huge concerns for online businesses. In the US alone, there are 63% more instances of identity stealing in 2021 as compared to 2019, and Federal Trade Commission (FTC) has warned all digital service providers to ensure security for their users.

Fraudsters are using deepfake technology, pretending to be someone else, and getting access to accounts, products, or services. Deepfakes are quite harder to catch as criminals use victim’s voice or image, bypassing the verification measures. The cybercriminals primarily target identities of executives to claim complete command over whole system.

Payment Fraud

Using stolen identities through deepfake, criminals get involved in various financial scams resulting in losses to businesses. Scammers request payments through fake images, audio, and videos, particularly from banks. As they use the identities of original users, it becomes pretty challenging for security systems to counter them, ultimately leading to losing monetary assets of sophisticated customers. It is estimated that 61% of verification checks could not distinguish fake actors from real ones.

Stock Manipulation

The deepfakes also have huge potential to attack stock market, manipulating overall share prices. In the past, criminals have used fake videos of Donald Trump promising to lift bans on certain items in America, which eventually caused a huge surge in revenue for specific companies. The scammers also use several techniques to damage some company’s reputation by gaining access to social media accounts of CEOs and making false statements through them, ultimately distracting investors.

Recent Fraud Cases Through Deepfake Technology

With growing digitization in financial sector, criminals are also using advanced techniques which have increased crime cases through deepfake. The experts have termed deepfake technology a potential threat to existing financial systems and highlighted need for robust verification measures which can eliminate criminals, ensuring transparency in transactions.

Fraudsters Cloned Company Director’s Voice in $35 Million Fraud

UAE highlighted a gang of at least 17 individuals who were involved in a payment fraud of $35 million. The criminals use AI voice cloning to represent themselves as a director of UAE-based company. While talking to the bank manager, they promised a huge business for which they needed a loan, and surprisingly, scammers use official email accounts for communication. As soon as the bank transferred the amount, criminals left without leaving any trail for law-enforcement authorities. UAE Police is still investigating the matter to find whereabouts of criminals and bring them under law.

Fraud via Deepfake Audio Steals $243,000 From UK Company

Here again, the criminals used AI-generated audio and represented themselves as a CEO of a German-based company. The scammers convinced CEO of an English company to make an urgent wire transfer of $243,000 to their account and assured him of reimbursement. The victim could not identify criminals due to perfect voice cloning and transferred money, which criminals moved to Mexico.

Regulatory Authorities Monitoring Deepfake Abuse

Most jurisdictions still lack effective laws against deepfake abuse, which has led criminals to exploit loopholes and get away without penalties. Some countries have recently enacted regulations to monitor suspicious deepfake activities prevailing in the financial sector.

US

National Defense Authorization Act (NDAA) has broadened its scope and covers deepfake frauds under its domain. As per the act, it has been instructed to cybercrime investigation departments to monitor all the cases of deepfake in past five years and present a detailed report to Congress. It has also been stated by the Act to legislate stringent laws against all those involved in creating fake videos of politicians, military personnel, and their families.

Canada

Although the Canadian government is yet to legislate laws for deepfake fraud, there are certain contemporary acts, particularly Copyright Act and Electronic Documents Law that governs frauds committed using deepfake technology. The Canadian legal community is working efficiently to address the malicious use of deepfake and other financial fraud linked to it.

How Shufti Pro Can Help

The scams related to deepfake are elevating, posing a huge threat to financial sectors. The only viable option to counter criminals is efficient facial recognition which verifies users’ identities in real-time. It is imperative for businesses to incorporate the latest security systems of biometric authentication and stay a step ahead of fraudsters through a tech-powered mechanism.

Shufti Pro is offering a viable facial recognition solution that can omit payment fraud, account takeovers, and identity theft. Powered by thousands of AI algorithms, Shufti Pro’s identity verification services offer the most secure and selfie-based onboarding method which provides results in five seconds with 98.67% accuracy.

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Identity Verification and Prevailing Crimes – How Shufti Pro’s Proof of Verification Services Can Help

With growing digitization, emerging technologies, and increased use of online transactions, a huge amount of users’ data is shared on the internet posing risks of identity theft. By using several fraudulent techniques, criminals get access to Personally Identifiable Information (PII), particularly names, social security numbers, and birthdays, further using these details to carry out several scams like money laundering. It has become imperative for all digital businesses to counter criminals using stringent identity verification services.

In the US alone, consumers lost $56 billion to identity fraud in 2021, which highlights risks posed to the online system. With the continued rise of cybercrime, companies are adopting sophisticated identity authentication methods to eliminate bad actors and ensure security for users. The online service providers are also focusing on verification services, including video and image proof, to keep a record of the whole validation system establishing a transparent structure.

Impact of Identity Fraud on Global Businesses [2022 Overview]

Identity theft is not a new threat; with every passing day, criminals are adopting advanced methods to cheat online businesses. The fraudulent attempts are causing identity losses and financial damages as well, aggravating the whole situation. Once criminals get successful in stealing identities, they can create fake bank accounts, make false insurance claims or hack users’ identities to carry out different scams. To keep bad actors away, businesses are spending billions to counter identity thieves.

The identity verification market was $5.52 billion in 2018 and is expected to rise by $18.12 billion in 2027. All the institutions, particularly banks, healthcare, social security, and telecommunication, are prone to high risks of identity theft. The only viable solution for businesses is to implement strict Know Your Customer (KYC) checks to verify users’ true identities while onboarding. In the US alone, there are 79% more identity crimes in 2021 compared to the previous year, raising the need for efficient measures to counter criminals.

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High Profile Cases of Identity Theft

Due to the huge number of users and lack of identity verification measures, it has become a hard task for law enforcement authorities to counter criminals. All the global authorities are working to eliminate this menace through crackdowns and legislation, but scammers are making their way to steal identities. In the recent past, several cases have surfaced, encouraging regulatory authorities to form a framework against fraudsters.

Interpol’s Crackdown on Cybercrime Gang

In 2021, Interpol conducted a massive crackdown on a gang involved in several crimes, particularly identity theft and money laundering. The law enforcement agencies of 20 other countries also participated in raids and arrested more than 1000 criminals. It was established in investigation that criminals were exploiting various online platforms to steal identities of users in bulk and further using the data to carry out various financial crimes, mainly money laundering and terror financing. Police have registered more than 1600 cases against the culprits and recovered $27 million of black money. The case is still ongoing, and criminals are yet to be penalized.

European Police Identified Global Cybercrime Gang

European Police have conducted a raid in Ukraine and Switzerland on a gang involved in a large number of cybercrimes. The criminals were using fraudulent techniques to manipulate users, stealing their identities and further using users’ data to carry out bank fraud. More than 1800 people in 71 countries were affected by scams, and Police have stated that they conducted the raid after investigating the matter for two years. The criminals have not yet been arrested, and law enforcement agencies are conducting operations to bring them under law.

Global Regulations against Identity Theft

The global regulatory authorities, mainly Financial Action Task Force (FATF), Interpol, and European Union (EU), have termed identity theft as a prime reason behind money laundering. All the member states have been instructed to legislate strict regulations curbing identity theft and ensuring transparency for online service users.

Australia

Online Safety Act 2021 is the most updated law in Australia responsible for monitoring all types of cybercrimes, including identity theft. As per the law, stealing users’ identities using any means, which can further result in hefty fines and even imprisonment. The act expands its authority over all online services, mainly banks, insurance companies, e-commerce, and other financial institutions.

Germany

Germany is one of the countries which has the most stringent laws against cybercrime, including hacking, phishing, and identity theft. German Criminal Code is the most comprehensive act which regulates penalties for cybercriminals. Section 263A of the code terms identity stealing as a severe offense that is punishable with five years of imprisonment or a heavy fine. Moreover, storing or modifying users’ data fetched through unfair means is also termed an illegal act resulting in penalties for culprits.

Proof of Verification Services

The growing cases of cybercrime have increased the importance of identity verification services. It is also a proven fact that these measures are the most viable solution against prevailing scams. The criminals manipulate their documents to disguise personal details, mainly name, address, and age, while getting involved in a variety of scams. It has become quite crucial for online service providers to implement robust pre- and post-verification systems that can identify criminals and keep a record of their authentication.

Document Verification

Documents are considered the most effective way to verify true identities of consumers. This is why criminals use fake records to onboard digital systems and exploit loopholes to steal identities of sophisticated users. Shufti Pro is offering the most viable document verification services which will extract original information using Optical Character Recognition (OCR) and authenticates a customer’s identity within a second with 98.67% accuracy. 

Address Verification

In order to ensure real-time reporting and prompt action, proof of verification services must include address authentication of users. The bad actors try to manipulate address details, disguising their original information and further committing crimes like identity theft. With Shufti Pro’s solution, businesses can verify the residential, business, and legal addresses of their users through their documents while keeping a record of the whole verification process.

Age Verification

There are several online services where age verification matters, particularly digital gambling, e-learning portals, and dating apps. Shufti Pro’s screening system is efficient enough to verify the true age of consumers by comparing it with different documents and recording all the data for future use in less than a second.

Final Thoughts

All digital services like telecommunication, banking, insurance, gambling, and e-commerce have immense importance in the current world. Combating prevailing crimes, particularly identity theft, is crucial for the system’s survival and it is the right time for companies to invest in pre and post-verification services. By implementing an efficient solution, digital companies will not only be securing their users’ identities but also curb several financial crimes particularly money laundering and terrorist financing.

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Evolution of Digital Payments and Prevailing Crimes – How Shufti Pro’s AML Screening Can Help

With emerging technologies, the digital payments trend is rising, and users are executing frictionless transactions through smartphones. Especially with the effect of COVID-19, online payment services are being used frequently and evolving with each passing day. Now when the pandemic has been controlled to a large extent, businesses are developing a comprehensive system of online financial transactions. This digital transformation of the entire payment sector has produced many long-term benefits for companies, and there is no denying that it is here to stay.

As the use of digital payments is growing, criminals have targeted these platforms for illicit activities exploiting the loopholes in system. It has become quite challenging for service providers to combat financial crimes, particularly money laundering and terrorist financing. In 2021, $8.6 billion was laundered through cryptocurrency, up by 30% compared to previous year.

Evolution of Digital Payments – An Overview

Since the start of civilization, humans have used several types of currencies to carry out financial transactions. It was in the mid-1990s when the first system for online payments was introduced by “Stanford Federal Credit Union” to facilitate their clients. In 1998, a few American investors founded Paypal, which became a game-changer in the digital financial system. Paypal continued to push boundaries with innovative solutions, mainly using email addresses and mobile payment apps for online transactions. The pandemic proved to be a turning point for digital remittances, increasing the use of online modes of payment at local cash-regulated businesses. At this time, there are several competitors of Paypal, including Apple Pay, Google, Amazon, Billpoint, and many others.

The use of online payment services is skyrocketing in all the regions across globe, leading to a vast growth in e-commerce and m-commerce industries. Amazon, Shopify, e-Bay, and Alibaba are the top online shopping platforms based on digital finance systems. Credit cards were the initial form of digital payment, but now, users have several options to use electronic modes of transactions, including currency wallets and cryptocurrency. Based on all advanced trends, there is no denying the fact that online transactions are the future of financial system and are here to stay for long.

Top Digital Payment Trends in 2022

Digital payments are transforming the global financial industry through adopting advanced and innovative trends. Currently, the online remittance system has evolved to a great extent offering users secure options for depositing and transferring their capital.

Biometric Authentication

The surge in the use of online payment systems has raised several security concerns like identity theft and account takeovers. Addressing these issues is crucial for the survival of system, and it has led service providers to opt for advanced security options, particularly biometric authentication of users. This type of verification includes fingerprint scanning, facial recognition, iris inspection, and even heartbeat analysis. These highly productive techniques ensure reliability and security for the whole digital payments ecosystem.

Digital Wallets

Currently, there are 3.4 billion digital wallet users across the world, with an expectancy to exceed 5.2 billion in 2026, representing a growth of 53%. All these platforms are used for storing payment information and using available funds whenever needed. Customers prefer digital wallets as they present quicker options for depositing money compared to banks. Supported by Near Field Communication (NFC) technology, e-wallets have become secure platforms for businesses to carry out their financial transactions.

Cryptocurrency

Cryptocurrency is considered the major innovation in online payments, presenting users with entirely advanced options for investments and money transfers. Crypto is working on the principles of blockchain technology which is the most efficient way of sharing payments person-to-person across the globe. Currently, more than 83 million people are using crypto wallets, an increase of 72% compared to 2018.

Money Laundering Risks in Digital Payment Industry

Although quite safe to use for financial transactions, online payment sector is associated with massive risks of monetary crimes, particularly money laundering and terrorist financing. Due to the lack of stringent regulations, criminals use a variety of money laundering techniques and disguise the illicit funds by storing them in several digital wallets. Unlike banks, online payment platforms have not enforced Anti-Money Laundering (AML) measures, providing a safe zone for scammers to carry out financial crimes.

Due to the complex nature of digital wallets, it is quite tough for service providers to monitor all transactions. It is need of the hour to implement robust Know Your Customer (KYC) and AML screening measures that can highlight criminals while taking strict action against them.

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Prevailing Crime Cases in Digital Payment Sector

All countries across the globe are witnessing a large number of crimes which has led the regulatory authorities to take strict action against culprits.  In the wake of this, several countries have legislated laws against prevailing crimes in the online payment industry, setting penalties for criminals.

Interpol’s Massive Financial Crackdown Along with 20 Jurisdictions

Interpol conducted a giant operation in collaboration with the law-enforcement authorities of 20 countries to arrest a gang of money launderers. The criminals were involved in several illicit activities, including online fraud, illegal gambling, drug trafficking, and romance scams. They were further using multiple online payment platforms to launder black money across different countries.

Police have arrested more than 1000 individuals while intercepting $27 million of illegal funds and blocking 2350 bank accounts used for criminal activities. A total of 1650 different cases have been registered against scammers, and investigations are still going on to decide the penalties.

Global Regulations Securing Digital Payment Industry

The Financial Action Task Force (FATF) has highlighted the threats of money laundering posed to digital payment sector. It has advised the member countries to legislate and enforce stringent AML checks to counter criminals. Several countries have implemented laws in light of FATF’s guidelines to regulate online transactions.

US

The Federal Trade Commission (FTC) is the primary regulatory authority in US, monitoring financial discrepancies in digital payment methods. FTC has advised all service providers to verify true identities of their users while onboarding so that criminals can be traced and brought under the law. Moreover, in the wake of rising crimes through merchant accounts, FTC has imposed a ban on electronic payment systems for opening accounts for fictitious companies involved in money laundering scams.

UK

The United Kingdom has legislated Financial Services and Markets Act (FSMA) which has all the provisions for monitoring the online payment sector. As per FSMA, all payment service providers should be vigilant enough to counter money launderers and terrorist financiers. It has been advised to law-enforcement authorities to ban all digital payment platforms not complying with the local and global AML regulations.

Canada

The Canadian government has enacted Electronic Payments Regulationsto monitor the digital payment system. As per the law, it is mandatory for the service providers to keep a record of every detail of financial transactions, including amount of payment, reference number, name of payee, etc., to track suspicious activities. Moreover, the Proceeds of Crime (PC) Act for curbing money laundering is already in place, which equally applies to individuals and businesses.

What Shufti Pro Offers?

Countering financial crimes, mainly money laundering and terrorist financing, is crucial for online payment industry and requires the integration of stringent AML checks. Digital payment services are here to stay, so it is the optimum time for companies to invest in AML screening.

Shufti Pro’s state-of-the-art AML screening solutions can help the digital payment industry stay compliant with global regulatory standards. Shufti Pro’s AML solutions are powered by thousands of AI algorithms that screen data of users against 1700+ sanctions lists and generate output in less than a second with 98.67% accuracy.

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Forensic Document Verification Solutions – A Key Step in Eliminating Identity Fraud

With emerging technologies, the demand for online services and products is skyrocketing, raising the need for businesses to implement identity verification measures. Identity documents are the most crucial source of authenticating details of users, and all organizations have implemented various methods for online verification of consumers. It is crucial for businesses that regularly deal with financial transactions, particularly banks, insurance companies, crypto firms, and ride-hailing platforms, to enforce a robust document verification system.

Despite all the efforts made by companies to verify true identities of users, document fraud is increasing and leading to several crimes, particularly identity theft, money laundering, terrorist financing, etc. In 2021 alone, the UK lost £2.5 billion in fraud with a surge of 22% in cybercrime cases as compared to previous year. It has become imperative for businesses to implement stringent online verification methods, particularly Optical Character Recognition (OCR) and forensic document examination.

Overview of Forensic Document Verification

Since the start of civilization, humans have remained involved in forgeries particularly changing seals, handwriting, and signatures. All these fraudulent practices led the law enforcement authorities to find solutions in order to restrict criminals from carrying out such illicit activities. The initial cases of document examination had been reported in the 3rd century in Roman Empire. During that time, Romans were famous for forgery, and in order to eliminate crimes, laws for forensic documents examination were introduced to verify their authenticity. In 539 AD, Roman Emperor Justinian established the “Justinian Code,” which set the base for forensic examination of documents while mandating for judges to hire experts who could examine forgeries.

Incorporating scientific laws in investigating evidence is forensic document examination, which is widely used across the globe, helping businesses to ensure safety. Due to increasing crimes, all organizations appoint document analysis experts who use various techniques to verify the authenticity of the information. Specialists use handwriting identification techniques, photography, and infrared imaging devices to counter fraudulent practices.

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High Profile Document Fraud Cases

Document fraud has become quite prevalent, affecting all organizations and businesses across the world, particularly financial companies, immigration departments, educational institutions, etc. Several cases have surfaced globally where criminals tried to exploit the system using various forgery techniques costing users billions of dollars. Global financial regulatory organizations, particularly EU, Interpol, and FTC, are working tirelessly to highlight the need for forensic document analysis for all jurisdictions.

Visa Fraud Cases Raising Concerns for Australian Authorities

Australia’s Immigration department has raised concerns about fraudulent visa applications submitted by students through different agents. The law enforcement authorities have highlighted that a large number of university candidates are using fake and forged documents to get admission in universities. In the wake of rising scams, the International Education Association of Australia has been instructed to cash a forensic lens over all documents for student applications. More than 600 such cases have been detected so far, urging educational institutions to have forensic document verification before granting admissions.

FIRs Registered by German Authorities for Document Forgery

German law enforcement authorities have revealed that 35 individuals, mainly from India, have been found to be running a visa scam. As per the initial investigations, criminals have submitted illicit tax returns, invitations, and other agreements to the German consulate. Forensic document analysis team has found that applicants were applying for tourist visas by forging invitation letters for some German exhibitions. FIRs have been registered against the criminals, and authorities have placed a ban on all culprits from entering Germany.

How Forensic Document Analysis can Halt Crimes

Forensic document analysis involves various techniques by experts that can eliminate criminals and prevent identity fraud and other financial scams. In the US alone, there were 68% more cases of document scams in 2021 as compared to previous year. Securing businesses using forensic forgery verification services is imperative, ensuring customers’ smooth onboarding. Let’s look at several organizations that can safeguard their consumers’ identities using stringent document authentication measures.

Banking Fraud

Banks are the top financial institutions affected by document fraud, including fake cheques, credit card fraud, and account takeovers. In the US alone, more than half a million cheque scams are reported yearly, resulting in huge financial losses. The criminals use forged signature techniques to manipulate the banking system and successfully take funds out of others’ accounts.

Moreover, the hackers steal identities of customers through different phishing attempts and carry out credit card scams. Forensic document services are the most viable solution in curbing all these financial scams, and banks should incorporate stringent verification measures securing identities of their customers.

Insurance Fraud

Insurance companies are a soft target for criminals, providing them with options for submitting fake medical or accident bills claiming huge amounts. It is estimated that in the US alone, $80 billion is lost through fraudulent claims. Forensic document examination is the most optimum solution for insurance companies to scrutinize submitted receipts by consumers. Incorporating scientific principles in document verification methods can help keep bad actors away and safeguard the confidential information of sophisticated users.

Immigration Fraud

The use of forged and fake documents for immigration is on the rise, resulting in many cases in several countries, mainly the UK, US, and Canada. The scammers try to manipulate the loopholes by submitting illicit tax returns, invitation letters, and educational certificates. Forensic document testing measures can help the immigration departments of all these countries in eliminating visa scams and penalizing criminals.

Global Regulatory Authorities Monitoring Document Forgeries

The global regulatory authorities, including Financial Action Task Force (FATF), European Union (EU), and Interpol, have highlighted forensic document examination as an important tool to curb money laundering, terrorist financing, and other financial scams. In the wake of this, several countries have legislated stringent regulations discouraging criminals and halting document fraud.

US

Title 18, Section 471 of the United States code terms document fraud as a federal crime. It has been highlighted that “Anyone, with intent to defraud, who falsely makes, forges, counterfeits, or alters any obligation or other security of the United States is guilty of a federal offense.” Any violation could result in hefty fines and imprisonment depending upon the nature of crime.

UK

The United Kingdom has implemented Forgery and Counterfeiting Act,” which terms document scams as a criminal act and proposes severe penalties for culprits. The act by the UK government covers all sectors, including education, insurance, online businesses, immigration, and banking.

KYC Compliance Using Forensic Document Authentication

All online businesses are struggling to fight identity theft, further deteriorating the user experience and resulting in financial losses. The whole system needs an effective Customer Due Diligence (CDD) approach to onboard customers after verifying their true identities. Document verification is the most important part of Know Your Customer (KYC) measures, and confirming legitimacy of ID papers of customers through forensic analysis can help businesses, combating increasing fraud and meeting global regulations.

What Shufti Pro Offers?

Shufti Pro’s state-of-the-art document verification services are the most viable option for online businesses to securely verify new clients. Powered by thousands of AI algorithms, Shufti Pro’s forensic document examination will prevent identity fraud, saving customers from fraudulent losses. The KYC services are specially designed to streamline customer onboarding using advanced techniques, particularly OCR and forensic document analysis, to authenticate users’ identities. Shufti Pro’s KYC solution is efficient enough to generate results in less than a second with 98.67% accuracy.

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Global Trade and Prevalent Crimes – How Shufti Pro’s AML Solution Can Help

International trade is exchanging services, capital, and goods across borders or territories, generating profits for the countries involved. Global trade hits a record-high of $28.5 trillion in 2021, with an increase of 25% as compared to 2020. With the transformation of water-resistant vehicles, airplanes, and railway trains, global trade has evolved to a great extent. Investors are now preferring to increase the production of their goods to maximize trade, gaining more revenue and profit.

The huge volume of global trade and influx of considerable investments in this sector has created a myriad of opportunities for criminals to carry out financial crimes, including Trade-Based Money Laundering (TBML) and terror financing. Unlike the corporate sector, trading is expanded across borders, making it quite difficult for jurisdictions to curb prevalent crimes. As a result, TBML has become a massive risk as criminals exploit legal transactions to launder illicit money.

An Overview of Trade-Based Money Laundering

The Financial Action Task Force (FATF) has termed international trade system to be highly vulnerable to risks of money laundering and terrorist financing. FATF has stressed all the member countries to take strict actions against illicit activities involving global trade. Although several countries have legislated stringent regulations to eliminate financial crimes, they still prevail and affect the businesses adversely. In a world with a population exceeding 7 billion, no country can survive without exports and imports, so eliminating money launderers is imperative for making trading activities risk free.

The State of Financial Crime Survey 2022 indicated that compliance professionals worldwide termed trade-based money laundering the second most potent way to disguise illicit funds. Due to weak monitoring system, money laundering groups and terrorist financing organizations exploit complex models of international trade to sneak black money into the pool. Various methods, particularly overbilling, underbilling, and physical movement of goods or money, are generally used to disguise illicit funds under layers of legal trade money. With increasing global trade, money laundering cases are also keeping up the pace, and the overall sector has gained regulatory attention. The trading sector is in dire need of strict Anti-Money Laundering (AML) checks identifying and eliminating criminals from the system.

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High Profile Cases of Trade-Based Money Laundering

Not only the global financial watchdogs but regulatory authorities of several countries are also taking strict action against money launderers. In the wake of this, several cases have been witnessed across the globe where courts have sentenced the culprits with imprisonment. Unless a strong global framework against money laundering and terrorist financing is not formulated, criminals will keep on exploiting the platforms causing monetary losses.

Money-Laundering Gang Involved in £100 million Scam

Britain Police conducted a raid and arrested the ringleader of the country’s biggest ever money laundering gang. The gang was involved in drug trafficking and laundering dirty money to Dubai through various trading means. The criminals laundered £100 million in one year by using multiple products particularly mouthwashes and coat hangers as a cover to disguise illicit cash The gang leader has been sentenced to nine years in jail, and cases of other participants are still ongoing in court.

Sting Operation by Australian Authorities Against Money Launderers

Australian Police recently conducted an operation against prevailing money laundering across the country. The law enforcement authorities seeded 12,000 encrypted cell phones into the criminal world to investigate money laundering network and channels used by criminals to carry out scams. Australian law enforcement authorities have revealed that transnational trade is one of the primary means used by the network to convert black money into legal assets. The Police have further vowed to take stringent action based on investigations against gang.

Global Regulatory Authorities Countering Trade-Based Money Laundering

Most countries affected by trade-based money laundering are legislating strict regulations and making their law enforcement agencies take hard action against criminals. FATF, Interpol and EU are some of the regulatory authorities working on a global scale to curb TBML. All these watchdogs are also assisting member countries to formulate regulations and enforce them.

US

United States (US) is considered as the most in FATF’s efforts to curb money laundering and terrorist financing. Financial Crimes Enforcement Network (FinCEN) is the main regulatory authority responsible for curbing money laundering and terrorist financing. In recent times, FinCEN has enforced several AML checks in a large number of import/export businesses and it is also monitoring cross-border trade. Moreover, the Trade Transparency Unit (TTU) is another important organization in US examining trade anomalies, and financial irregularities associated with TBML, customs, tax evasion, etc.

UK

The lawmakers in UK have legislated several laws to monitor money laundering activities in every sector. These laws may include; Proceeds of Crime Act (POCA), Sanctions & Money Laundering Act (SMLA) and Terror Financing Regulations 2017. UK authorities strictly monitor TBML in light of local regulations and FATF’s guidelines. The law enforcement agencies in UK are actively working to eradicate money laundering through cross-border trade and it has imposed strict penalties in case of violation.

Australia

Australian Transaction Reports and Analysis Center (AUSTRAC) is actively working in Australia to curb money laundering and other organized financial crimes. Financial regulatory authorities have recently issued a detailed report highlighting the vulnerabilities of international trade to criminal activities. The recommendations by FATF have largely been taken into account and it has advised to custom department to implement strict AML checks to discourage money laundering in cross border trade.

Why AML Compliance is Important Against Trade-Based Money Laundering?

Due to complex nature of trade-based financial crimes, it is quite hard to eliminate criminals without implementing strict AML checks. All the financial institutions and import/export businesses should maintain Enhanced Due Diligence (EDD) approach to verify the identities of all the entities on the system. In most of the cases, money launderers use fake identities while onboarding and carryout crimes without leaving any trail.

The global financial watchdogs particularly EU, Interpol, FATF and FTC have accumulated data of money launderers in the form of Politically Exposed Persons (PEP) and other sanctions lists. The trading businesses should implement a system of screening data of new clients against these lists to counter criminals. Through stringent AML checks, companies and countries can add an extra layer of protection on global trade preventing it from illegal activities.

How Shufti Pro can Help?

Securing global trade from the crimes particularly money laundering and terrorist financing through efficient AML checks is inevitable. With high potential of investment, global trade is increasing every year and it is the right time for countries to invest in AML screening solutions.

Shufti Pro’s AML screening solution can assist business owners to comply with global regulatory standards while eliminating money laundering. Shufti Pro’s AML solution screens data of users against 1700+ sanctions lists and generates results in less than a second with 98.67% accuracy.

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Inside the EU’s New Crypto-Assets Regulatory Regime – How Shufti Pro Can Help

With transforming technologies, the use of cryptocurrency is skyrocketing, and a large number of financial institutions are offering crypto-related services to their clients. User engagement on cryptocurrency exchanges and platforms is also increasing more rapidly than ever. Europe is one of the continents with the highest cryptocurrency adoption rate, with $1 trillion worth in 2021, covering 25% of all activities worldwide. The massive influx of money in crypto market has encouraged criminals to carry out money laundering and terror financing by exploiting loopholes in system.

Considering the rapid growth of crypto in all member countries, EU’s law-enforcement authorities are legislating laws to secure crypto users while empowering economic growth. The European crypto market is expected to increase by 16.94% in coming years, raising the need for strict Anti-Money Laundering (AML) measures to protect the financial system.

European Union’s Landmark Regulation to Monitor Crypto

The rising cases of money laundering and terror financing in crypto industry have led law-enforcement authorities in Europe to take stringent actions against money launderers. EU officials have signed an agreement on the first regulatory regime for crypto sector. EU lawmakers along with the European Commission hammered out a deal in Brussels after hours of negotiation. All the members agreed upon strict measures to curb money laundering and other financial crimes from crypto market.

The landmark law, Markets in Crypto-Assets (MICA), has been formulated to regulate all the major stakeholders of cryptocurrency market, including exchanges, crypto wallets, and coin providers. As per the new rules, all concerned parties in crypto business must implement strict AML measures to keep bad actors away. It has been instructed to all stakeholders to report suspicious activities involving mass withdrawals and deposits. The restrictions have also been placed on transactions of stablecoins up to 200 million euros per day. MICA has stated that all these regulations will come into force as early as 2024, and till then, member countries can propose more suggestions to eliminate monetary crimes in crypto sector.

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Prevailing Crimes in European Crypto Market

All the members of EU, particularly Eastern European countries, are experiencing more crimes in crypto sector, with $815 million lost to different scams in 2021. Unlike banks, crypto market has not imposed stringent AML checks, which has led the criminals to legalize their black money by investing in cryptocurrencies. In the recent past, several cases of corruption and terror financing have surfaced across Europe, encouraging law-enforcement authorities to regulate sector through effective measures.

$22m Crypto Investment Fraud Taken Down by European Police

European Police have conducted a raid and arrested a gang involved in crypto fraud across 71 countries. The criminals were encouraging common people through social media campaigns to invest in different fake coins and promising huge profits in return. 522 victims have registered complaints, and it is estimated that scammers collected $22 million from investors. Police have reported that criminals were also involved in money laundering activities. Investigations are still going on to trace all the financial transactions.

Suspected Cryptocurrency Fraudsters Arrested in Spain

The Spanish Civil Guard detained a group involved in money laundering through a cryptocurrency investment platform. €2.5 million worth of assets, including electronic devices, cars, and cash, were seized during the raid. The gang had set up a fake cryptocurrency investment coin and was offering a profit of more than 2.5% to the investors. The Police investigation is still going on, and a number of victims across Spain have been identified.

Recommendations by European Regulators to Curb Money Laundering and Terror Financing

Crypto-asset Service Providers (CASPs) are the major stakeholders of the cryptocurrency market, and they will now have to pass a variety of checks securing users’ funds. European law-enforcement agencies have also proposed to screen the data of all users against sanctions listed by Financial Action Task Force (FATF), EU, and Interpol to restrict criminals while onboarding.

Regulating Stable Coins

The EU has raised serious concerns about stablecoins and recommended stringent regulations. As per the new regulations, it has been made mandatory for all stablecoins issuers to register all of their customers and obtain authorization for operations. The EU has further put limitations on stablecoins of maintaining a 1:1 reserve in their backend and it is expected that this move will wipe out billions of dollars of black money from crypto market.

Reducing Fragmentation

The member countries of the European Union have termed the harmonization of crypto market a crucial step that will lead to a comprehensive monitoring system.  MICA has advised financial organizations to set a road map curbing illegal small crypto firms and setting the ground for giant licensed companies which can be monitored through a centralized system. Following the suggestions, Coinbase, the leading cryptocurrency exchange platform, seeks licenses in all European countries.

Securing Crypto Wallets

MICA has highlighted crypto wallets as the main source of money laundering and other financial crimes. The criminals are using these wallets to store their crypto assets; most do not have any verification checks to identify users’ true identities. EU Commission has strictly instructed crypto wallet service providers to implement robust identity verification measures to discourage the use of fake and stolen identities for illicit account creation.

How AML Compliance can Help the European Crypto Market?

European countries share a major part of global crypto market, and high influx of investments has led the criminals to carry out money laundering. EU has taken a considerable step forwards in addressing the prevalent financial crimes in crypto market. Soon after the implementation, Europe will become the region with the most comprehensive set of crypto regulations. Money laundering cases through cryptocurrency investments are increasing by 30% yearly, further raising serious concerns, particularly terrorism.

The European Commission has proposed that all the stakeholders need to screen data of users and crypto exchanges against sanctions lists by EU, FATF, and Interpol, which is the right step toward curbing monetary crimes. Moreover, Enhanced Due Diligence (EDD) approach is also imperative for the whole sector to verify true identities of users. Cryptocurrency is the future of digital financial transactions, and eliminating criminals from system is imperative to make it a secure place for investments.

What Shufti Pro Offers?

Combating financial crimes, particularly money laundering and terrorist financing, requires crypto exchanges to integrate efficient AML checks. Cryptocurrency adoption is showing no signs of slowing down, so it is the right time for crypto firms to invest in AML screening solutions.

Shufti Pro’s state-of-the-art AML screening solution can help European cryptocurrency exchanges to stay compliant with international regulatory standards while preventing money laundering. Powered by thousands of AI algorithms, Shufti Pro’s AML screening solution screens data of users against 1700+ global sanctions lists and provides results in less than a second with 98.67% accuracy.

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Prevalent Crimes in Forex Industry – How Shufti Pro Can Help in Mitigating Financial Crimes

Emerging technologies and digitization are transforming the investment sector, creating opportunities for business. With a trading volume of $6.6 trillion daily, the forex industry is one of the evolving sectors that has contributed to money remittance. Every coming year is witnessing more investors in the forex industry, and it is recognized as the most dynamic platform for investment. Even during COVID-19, the forex industry attracted huge capital due to its high liquidity.

With the influx of investments, forex sector has become highly vulnerable to money laundering and other financial crimes. The criminals are using myriad ways to exploit loopholes in system to carry out illicit activities. Although forex exchanges and global regulators are making efforts to eradicate crimes, money laundering is still prevalent, rising the need for Know Your Customer (KYC) and Anti-Money Laundering (AML) measures.

Forex Industry Insights [2022]

Foreign exchange trading, commonly called forex trading or FX—is the global market for exchanging foreign currencies. Forex is the largest industry in the world, and the trades that happen in it affect everything in the global market.  Currently, the forex market is worth $2.40 quadrillion with an increase of 29% compared to 2016. The forex industry offers trading in more than 170 currencies. Unfortunately, forex exchanges have become potential targets for criminals posing a huge threat to digital currencies and their users. In the first half of 2022 alone, total amount lost from all types of scams in forex industry is $295 million. It has become crucial to regulate the sector through stringent identity verification and anti-money laundering measures.

Money Laundering Risks in Forex Industry

The growing volume of remittances is helping criminals, including drug dealers and human traffickers, to use multiple methods to launder money. Most forex trading platforms do not have stringent measures for verifying the identities of investors, which ultimately helps criminals get away without any trail. There are many forex exchanges that are involved in money laundering by disguising the illicit funds of fraudsters under their legal money. The scams are not only limited to money laundering but also becoming a source of other heinous crimes, particularly terror financing.

The Financial Action Task Force (FATF), the primary regulatory authority to monitor money laundering, has also highlighted the vulnerabilities of forex industry to financial scams. It has been advised to all the member countries by FATF to regulate forex sector by incorporating AML screening measures. Given the huge worth of forex industry, KYC and AML checks are imperative for the transparency of system, which will keep the financial criminals away while onboarding.

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High Profile Cases in Forex Industry

The majority of the countries have lax regulations or have not taken significant preventive measures against forex industry scams, including money laundering, terror financing, and other financial crimes. Due to these reasons, several multi-million scams have surfaced, highlighting the need for effective KYC AML solutions.

Fraudulent Forex Trading Platform Charged in $59 Million Scam

A US-based forex trading firm “EminiFX” has been put under investigation for its involvement in wire fraud exploiting legit investors. The CEO of the company has been arrested who has admitted to collect $59 million from users and further using these funds in money laundering.

The company has been found involved in urging investors to invest money and get weekly profits in return. The court has ordered law-enforcement agencies to further investigate the company’s financial transactions to decide the culprit’s penalty.

Banks Fined With €344 Million for Forex Trading Fraud

The law-enforcement authorities in Germany have imposed a fine of €344 million on three different banks, including Barclays, RBS, and HSBC, for their involvement in forex industry fraud. The investigation has found that banks were involved in sharing users’ sensitive information and trading plans with fraudsters through private chat rooms.

Moreover, the banks also assisted criminals in laundering illicit funds and converting them into legal assets. The court has stated that banks have undermined the integrity of the financial sector at consumers’ expense.

Global Regulatory Authorities Monitoring Forex Trading

The rising crime ratio and monetary losses have compelled major jurisdictions along with global regulators like FATF and Interpol, to take strict action against criminals. In the wake of this, several laws have been legislated which have stressed the need to implement KYC and AML measures in the forex industry.

US

The Financial Industry Regulatory Authority (FINRA) is the primary body working to restrict criminal activities in the forex industry. FINRA is working under the guidelines of Bank Secrecy Act and USA Patriot Act, imposing strict penalties on culprits. Not only the individuals but forex companies are also liable to law, and any violation could result in a minimum fine of $1,000,000.

UK

The Financial Conduct Authority (FCA) governs all the forex trading companies in the UK while setting operational standards for the whole sector. FCA is working closely with the Bank of England to ensure that all the forex trading platforms remain compliant with the regulatory obligations. FCA is also tasked with licensing all the UK forex entities and reporting to law enforcement authorities in case of any violations.

Australia

The Australian Securities and Investment Commission (ASIC) regulates forex trading in country while setting requirements for forex companies to register. It has made mandatory for firms to provide name, address, nature of business, and details of directors along with other documents before starting any forex business.

ASIC is working with the collaboration of Australian Transaction Reports and Analysis Center (AUSTRAC), which is responsible for monitoring AML compliance of financial companies. Every new company has to pass strict AML checks by AUSTRAC to register and start working. In case of any violation, a minimum penalty of AUD4.4 million for individuals and AUD22.2 million for corporations has been set.

Why KYC/AML Compliance is Important for Forex Industry?

The forex industry is a highly dynamic and profitable sector with a huge potential for investment. A large number of investors are mainly carrying out their business activities through forex firms which has increased the need for monitoring and regulatory measures. Huge risks of money laundering and terror financing are not only resulting in financial crimes but also damaging the reputation of whole sector. It is need of the hour to implement robust KYC measures to verify true identities of users before onboarding while ensuring a seamless customer experience. The KYC solution must be efficient enough to authenticate investors through document verification and facial recognition. Only in this way forex trading firms can be made transparent and secure for investors.

Furthermore, it is also mandatory for the sector to implement stringent AML screening measures in system. Global regulatory authorities, particularly Interpol, EU, FCA, and FATF, have gathered huge data of money launderers in the form of sanctions and Politically Exposed Persons (PEP) lists which must be considered while onboarding. Data screening of users against these lists can help the forex companies to keep money launderers away from system.

How Shufti Pro can Help?

Shufti Pro’s state-of-the-art KYC and AML measures can help forex trading companies incorporate enhanced customer monitoring checks. Powered by thousands of AI algorithms, KYC solutions will authenticate the users through document verification and facial recognition.

Shufti Pro’s AML screening solution has access to 1700+ sanctions lists by global watchdogs and screens data against them to identify criminals. The system is efficient enough to generate output in less than a second with 98.67% accuracy.

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Know Your Donor – Securing NPOs and Charities Through KYD/AML Solution

Emerging technologies and growing digitization have increased financial crime risks in Non-Profit Organizations (NPOs) and charities. All the NPOs operating on a global scale face significant threats in the form of financial fraud. Criminals are exploiting these noble platforms to carry out money laundering and terror financing, harming the overall reputation. Although a sacred sector with the aim of helping poor people, it is still home to a myriad of illicit activities.

In 2021, US citizens donated $484 billion to charity which was used to help deserving people by investing in different sectors, particularly education and health. Unlike banks, NPOs and charities have not implemented stringent checks to curb criminal activities resulting in financial losses and a bad reputation for the whole sector. Therefore, preventing criminals from exploiting the system through Know Your Donor (KYD) and Anti-Money Laundering (AML) screening checks has become imperative for whole sector.

Risks of Financial Crimes in NPOs and Charity Organizations

Money laundering and terror financing are significant crimes linked to charity organizations, raising global watchdogs’ concerns. Criminals donate large sums of dirty money to charities/NPOs, which are further layered in with legitimate funds of the organization. After that, a fake beneficiary is a setup that receives laundered money, making it legal. Multiple other ways are also used to exploit NPOs, including illegal fundraising, credit card scams, and fake invoicing.

In the US alone, more than 1.5 million NPOs have been registered, raising potential risks of identity fraud and money laundering. The Financial Action Task Force (FATF) has termed charity organizations as safe havens for money laundering and terror financing. FATF has also issued detailed guidelines for all member countries to monitor charities by implementing strict AML/CFT checks and report to regulatory authorities in case of any suspicious activity. Money laundering accounts for 3% to 5% of global GDP every year, and it is mandatory to monitor all industries, including charities and NPOs.

Fraud Cases in Charities and NPOs

NPOs and charities are also involved in facilitating bad actors by providing them opportunities to launder money. Several cases have surfaced in the past where charities have been found involved in multiple financial crimes. Fraudsters register charities using fake identities and further abuse these platforms to carry out multiple financial scams.

California Charity Scam – Operators Sent to Prison for Fraud

Law enforcement authorities of the US conducted a raid in California arresting a gang running a fake charity to commit mail fraud and tax evasion. The organization was set up to provide financial assistance to low-income families and individuals. They received $1.35 million in the fund, and only a small percentage was used for charitable purposes.

The criminals used charity money to disguise their black money by spending it on luxury items while avoiding taxes. The court found all gang members guilty and penalized culprits with imprisonment. California Police has vowed to take action against all the bad actors involved in abusing charity organizations and bring them to trial.

American Cancer Society of Michigan – A Fake Charity

Michigan Police have captured a gang who was running an illegal charity organization in the name of supporting cancer patients. In 2020, a few criminals registered “American Cancer Society of Michigan” as an NPO and received funds from the whole country, which was further used to serve purpose of money laundering.

The organization received $152,000 in funds and used this money to convert its illegal assets to legal ones. The investigations are still going on, and court has ordered to trace all other transactions involved in money laundering scheme.

Global Regulatory Authorities Monitoring NPOs and Charity Fraud

Since 9/11, global regulatory authorities and major jurisdictions have taken strict action against money laundering and terror financing. Financial watchdogs like FATF and Interpol are working tirelessly to legislate laws curbing financial crimes. Due to high influx of money, charities have also become a major source of money laundering, which has urged the legislators to monitor non-profit organizations and eliminate the chances of financial crimes.

Canada

With more than 86,000 charities in the country, Canada is highly vulnerable to money laundering through NPOs. Canadian government has termed charities as a huge source of monetary crimes and issued detailed guidelines for common people to avoid charity scams.

Office of Consumer Affairs is the primary regulatory authority monitoring non-profit organizations and has proposed several legislations to lawmakers to counter charity crimes. The law-enforcement agencies have instructed all people to contact Canadian Anti-Fraud Call Center to report any suspicious activities by NPOs.

Australia

Australian Charities and Not-for-profit Commission (ACNC) is the national regulator of NPOs. It has expressed its concerns against charity fraud and warned common people to beware while raising funds for any non-profit organization. ACNC has termed money laundering and terror financing to be potential threats to NPOs.

On its website, ACNC has mentioned a list of checks which everyone must follow while donating to noble causes through charities. It has also warned proprietors of non-profit organizations to incorporate KYD and AML measures to restrict criminals from abusing the system.

Germany

Germany has remained quite vigilant towards prevailing crimes in charities and non-profit organizations. As per German laws, all NPOs must submit tax details, information about donors, and detailed reports about the spending of funds to law enforcement authorities. In order to halt money laundering by political personalities, German authorities have put a ban on people running charity organizations from participating in politics.

Implementing KYD/AML Compliance in NPOs and Charity Organizations

In the wake of rising crimes in charities, implementing a robust system to counter criminals has become mandatory. Money laundering and terror financing are menaces to the whole financial system giving rise to several heinous crimes, particularly terrorism. Prevailing fraud in charities is not only affecting financial operations but also giving a bad name to the whole sector. Like banks and insurance companies, non-profit organizations are in dire need of strict KYD and AML measures restricting bad actors from exploiting loopholes of NPOs.

Customer Due Diligence (CDD) is critical for reducing crime ratio and verifying true identities of donors. KYD measures, including facial recognition and document verification, can help in keeping bad actors away while onboarding. Moreover, global regulators like FATF and Interpol have accumulated the data of money launderers in the form of sanctions and Politically Exposed Persons (PEP) lists which must be taken into account to identify scammers.

How Shufti Pro can Help?

Shufti Pro’s identity verification measures can help in identifying true identities of donors through facial recognition and document verification. Powered by thousands of AI algorithms, KYD solution is the most viable option for charities and NPOs.

Shufti Pro’s Anti-Money Laundering (AML) screening solution has access to 1700+ sanctions lists by global watchdogs and screens data against them to identify criminals. The system is efficient enough to generate output in less than a second with 98.67% accuracy.

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Prevailing Identity Fraud in Telecom Sector – How Shufti Pro Can Reduce the Risks

The telecommunication industry holds significance for the information sector as it is primary infrastructure for communication through phones, cables, and the internet. Emerging technologies and increased digitization have skyrocketed the risks of cyberattacks on telecom industry, eventually leading to identity theft and other financial crimes. Fraudsters use a myriad of ways to exploit the system, including spoofing, phishing, robocalling, and account takeover.

Users have to input their details before using any telecom services, resulting in a large number of data shared on the internet. Identity theft has become the most common scam in the telecom sector, increasing other crimes, particularly money laundering, account takeovers, and account opening fraud. Fraud in telecommunication industry is rising at an annual rate of 20% to 30%, highlighting the need for robust identity verification measures.

Telecommunication Industry – A Highly Vulnerable Sector

Unlike many other sectors like banks, insurance companies, and real estate, telecommunication industry has not implemented stringent measures to curb fraud, resulting in multiple scams. Criminals steal the identities of users through several means and further use sensitive data to carry out various crimes. Identity fraud has adopted the form of a huge threat to overall digital system and is termed a global security concern by Financial Action Task Force (FATF).

The number of mobile phone users is around 7 billion in 2022, making telecom sector highly vulnerable to identity fraud and other monetary crimes. All the global financial watchdogs and major jurisdictions are working tirelessly to implement a strict system of identity verification in telecom sector to eliminate bad actors. Telecommunication Service Providers (TSPs) should regularize the industry by incorporating Know Your Customer (KYC) measures, including biometric verification, facial recognition, and document authentication.

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High Profile Cases in Telecom Sector

Sim swapping, subscription fraud, CLI manipulation, and robocalling are some of the major scams encountered by telecommunication service users. Due to legislation by several countries against telecom fraud, many cases have surfaced in the recent past and criminals have been penalized. Identity theft, money laundering, and other financial scams are a huge threat to overall digital system, which should be monitored through effective KYC solutions.

Telecom Firm in UK Hit by Identity Theft 

The UK-based telecom company has been targeted by scammers resulting in identity loss of a large number of users. The owner has complained that scammers are blackmailing company and providing fake one-star reviews on their services.

The CEO of company has further stated that a complaint has been registered against scammers to Google, but no strict action has been taken yet. It has been termed by Google that investigations are going on and criminals will be penalized as per the regulations.

Aussie Telco KYC Failures Prompt Large Fine

Australian Communication and Media Authority (ACMA) has penalized a telco company that was providing phone lines to the users without verifying their true identities. ACMA has further termed that company remained unable to comply with the KYC regulations and provided services without following identity verification standards. The company has also admitted to not fulfilling the security checks recommended by regulatory authorities.

ACMA has imposed a fine of AUD199,800 and also asked the company owners to compensate all the users who suffered due to fraudulent activities by unidentified users. ACMA emphasized the importance of protecting customers from all such scams and instructed all telecom companies to ensure KYC compliance.

Global Regulatory Authorities Monitoring Telecommunication Industry

In the wake of prevailing identity fraud and financial scams, global authorities have taken a strict stance against prevalent crimes in telecommunication sector. FATF, Interpol, and many countries have legislated stringent laws to incorporate identity verification measures in telecom companies.

Canada

Canada’s Anti-Spam Legislation (CASL) is the primary body responsible for monitoring scams in telecommunication sector. It has committed to reduce the harmful effects of spam and related threat. CASL is working along with Canada’s Competition Bureau and the Office of Privacy Commissioner, to eradicate chances of fraudulent activities in telecom sector.

It has taken a strict stance against the violators and set administrative monetary penalties for criminals. In multiple cases, several fraudsters have been penalized with imprisonment and fines for violating rules of state.

Sweden

Electronic Communications Act (ECA) is monitoring the whole telecommunication industry in Sweden by implementing identity verification measures for companies. ECA has termed the telco sector as highly vulnerable to identity theft, phishing, and other financial scams. Authorities have issued a road map to penalize all the bad actors exploiting the telecom industry.

Singapore

The Infocommunications and Media Regulator (IMDA) is primary regulatory body overlooking the telecommunication industry in Singapore. Due to increasing crimes, IMDA revised existing laws in May 2022 and implemented more strict measures to curb financial crimes. IMDA has issued detailed guidelines for telecom companies to enforce identity verification measures before onboarding new users. It further proposes penalties to culprits in case of violations in the form of imprisonment and fines.

The Need of Identity Verification Measures for the Telecom Sector

Compared to 2019, fraud losses increased by 28% or $11.6 billion in 2021, highlighting the need for robust identity verification measures. Several sectors, particularly banks and insurance companies, have controlled the crime ratio by implementing several KYC measures, including facial recognition, and document verification. The Telecom industry is inevitable for digital operations, and it is need of the hour to regulate it by incorporating strict verification checks.

Not only identity theft but criminals are also carrying out money laundering using telco companies, raising the need for AML measures. Although it will be a gruesome task for Telecom Service Providers (TSPs) to regulate the whole sector, there is no feasible option than incorporating KYC and AML checks. The governments of several countries are already working to eradicate financial scams from mobile operator companies which must be accompanied by TSPs.

How Shufti Pro Can Help?

Shufti Pro’s state-of-the-art identity verification services are a feasible option for telecommunication companies. IDV services include; facial recognition, document verification, and biometric authentication, which are essential for an ideal KYC. Shufti Pro’s KYC solutions are powered by thousands of AI algorithms verifying true identities of users before getting them on board.

Anti-Money Laundering (AML) screening solution by Shufti Pro has access to 1700+ global sanctions lists and screens users’ data against them to keep bad actors away from the system. It provides output in less than a second with an accuracy of 98.67%.

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Prevailing Crimes in Metaverse – How Shufti Pro’s IDV Solution Can Help

Metaverse is a virtual space where people belonging to the same or different physical regions can interact with each other. Although not yet recognized globally, it is predicted by experts that metaverse will soon find a huge space in the contemporary world. The concept of metaverse is quite old, but it came into mainstream when Mark Zuckerberg changed Facebook’s name to “Meta.” With the metaverse ecosystem expanding, more online opportunities are emerging making it highly profitable for investments.

To access the metaverse, Augmented Reality (AR) and Virtual Reality (VR) devices are used, which are in high demand nowadays. The technological giants, particularly Facebook, are investing heavily in AR & VR devices, setting high competition among companies. It has been estimated that VR gear sales are set to hit $10 billion in 2022, with an expectation of rising in coming years. Due to the huge potential of investment in metaverse, meta criminals are also finding several ways to exploit the system resulting in identity theft, money laundering, and other financial crimes.

An Overview of Metaverse – A Highly Vulnerable Sector

Companies and individuals are spending billions of dollars on metaverse and other digital assets. The huge influx of money and lack of stringent regulations have encouraged cyber criminals to exploit loopholes by getting involved in financial crimes. Identity theft is one of the prevalent scams in metaverse, which has become a huge threat to existing systems giving rise to several fraud, particularly account takeovers, multi-accounts, and data breaches. In 2021, metaverse companies faced 60% more cyber attacks as compared to the last year. Cybersecurity experts have also termed the metaverse to be a safe haven for meta-criminals which is in dire need of strict Know Your Customer (KYC) checks.

Metaverse is mainly dependent on cryptocurrency, which relies on blockchain Distributed Ledger Technology (DLT), and the lack of stringent regulations here paves new ways for scammers. With emerging technologies, criminals have also adopted advanced techniques of fraud which must be encountered to secure users. Metaverse is the new reality of world that is here to stay, and it is imperative for all stakeholders to implement strict KYC measures making it a secure platform.

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Recent Crime Cases in Metaverse

With the increasing investment, crime rate in metaverse is also going up, and criminals are finding advanced ways to exploit loopholes. Several fraud cases have been witnessed around the globe, raising the need for uniform legislation for whole sector.

Cybercriminals in US Target Metaverse Investors

Three different cases have been filed against a metaverse company in Florida selling fake metaverse land and convincing people to make investments. All the investors have stated that in first few months, everything was good, but suddenly they lost all their virtual land.

It has been reported by CNBC that hackers use multiple fake links for fraud and asked users to input their details which resulted in the loss of their virtual properties. Investors further said that the hackers made them believe that websites were credible but turned up phishing sites. The affectees of scam have asked law-enforcement authorities to take action against culprits and restrict their illegal activities.

Fraudulent Russian Metaverse Project Halted by Five US States

Law-enforcement agencies of five states in the US have announced plans to take immediate action against a Russian organization. The company was involved in fraudulent deals of NFTs to investors and further funding a metaverse casino “Flamingo Casino Club”. The investigations have found that the company was responsible for selling fake metaverse properties to sophisticated users. After purchasing the assets, users ended up losing their money as whole scheme was a fraud.

Existing Frauds in Metaverse

With transforming technologies, criminals are finding advanced ways to abuse the system. Multiple types of scams are linked with metaverse, and fraudsters are using various techniques to carry out scams, particularly identity theft and money laundering.

Account Takeovers

Metaverse companies are encountering major scams in the form of account takeovers. Hackers use advanced phishing which may include; sending fake links to users and convincing them to invest in NFTs. As soon as the users log in using their credentials, the account gets hacked and all the data is lost.

Scam Projects

Hackers use this trick to convince the users to invest in various projects which are usually fake or have no value. The criminals promise a myriad of lucrative profits to investors and soon after investment, the project vanishes away while users end up losing money and time.

Data Breaches

Due to a lack of strict regulations, metaverse platforms are highly vulnerable to data breaches. Users have to input their details while logging into their account and hackers use advanced techniques to get users’ details. All this information is further used to steal metaverse assets of investors.

Who Will Govern the Metaverse?

Increasing identity theft, money laundering, and other monetary crimes have led stakeholders to devise a monitoring structure for metaverse. Investors are countering a large number of financial threats and it has become imperative to eliminate meta criminals for smooth flow of system. To be viable as a place to do business, the metaverse will need real controls to protect users from abuse, fraud, and loss.

Global authorities, particularly the Financial Action Task Force (FATF) and Interpol are working tirelessly to develop a system to monitor suspicious activities in metaverse.  It has been instructed by FATF  to implement Risk Based Approach (RBA) in virtual assets and virtual asset service providers. It has further been termed that metaverse is associated with high risks of money laundering and is in dire need of strict Anti Money Laundering (AML) regulations. FATF has also stated that they will continue working with member countries to formulate stringent laws against meta criminals.

The Role of KYC in Eliminating Meta Criminals

Metaverse, with a huge potential for investments and business, is exposed to identity theft and other financial crimes, which can be curbed through strict KYC checks. Criminals on board the system using fake information and exploit the platform by stealing details of other investors. The metaverse market is growing by 13.1% every year, making it highly vulnerable to monetary scams.

KYC measures mainly include facial recognition, document and address verification which can help in verifying true identities of investors and keeping bad actors away. By the end of 2024, metaverse market will be worth $800 billion, so it is the right time to implement strict KYC checks protecting investors from scams.

What Shufti Pro Offers?

Metaverse is digital future, and it is quite critical to secure these platforms using stringent measures. Shufti Pro’s identity verification services are the most feasible solution for metaverse market. It will help virtual service providers verify the true identities of their users before getting them onboard and reporting any suspicious activity. Shufti Pro’s KYC solution is powered by thousands of AI algorithms, verifying the identities of users through facial recognition and document verification. Generating results in less than a second with 98.67% accuracy makes Shufti pro an ideal solution for business.

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