Danske Bank Expecting Huge Profit Rebound as Money Laundering Case Ends

Danske Bank Expecting Huge Profit Rebound as Money Laundering Case Ends

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Danske Bank expects a massive rebound in earnings this year, 2023, after the closure of the money laundering case.

Danske Bank expects a tremendous earning rebound this year after losing sums in the money laundering case of 2022. The bank will no longer be tracked for the money laundering scandal, as the case comes to an end.

According to the company compiled-poll, the largest lender in Denmark expects the net profit for 2023 in between the ranges of 15 to 17 billion Danish crowns ($2.2-2.5 Billion). The analysts have estimated the earnings to be 15.8 billion crowns on average. 

In 2022, Danske Bank lost 5.1 billion crowns. ($1 = 6.7579 Danish crowns)

“To have a net loss on the bottom line is of course not satisfactory. However, it comes as a consequence of the conclusion of the Estonia matter, which marks an important turning point for Danske Bank,” the Chief Executive, Carsten Egeriis said.

The bank recorded a net profit of 4.2 billion crowns in the fourth quarter of 2022, roughly in line with the expected poll of 4.3 billion compiled by Danske.

The latest report from Danske is the first in over five years which is not overshadowed by the threats of massive fines by the US authorities over the lender’s participation in one of the world’s largest money laundering scandals.

In December 2022, Danske pleaded guilty to the bank fraud conspiracy, forfeiting $2 billion as part of the agreement with the US just to settle the investigation, involving billions of dollars in illegal payments via the Estonia branch.

Danske expects costs in 2023 to be higher than the average of 25 billion expected by the analysts. 

“The costs are still too high and Danske Bank has more loss provisions than others. Danske Bank is heading in the right direction, but it is going slowly,” Nordnet analyst Per Hansen said in a note.

As a result of a weaker macroeconomic outlook, Danske expects loan impairment charges of up to $3 billion. 

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UAE Central Bank Fines Firm $490,000 for Violating AML/CFT laws

UAE Central Bank Fines Firm $490,000 for Violating AML/CFT laws

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The UAE’s Central Bank has charged a financial firm Dh1.8 million ($490,000) over breaching the country’s AML/CFT laws.

The central bank of UAE has imposed a penalty of $490,000 with additional compliance requirements on a financial firm that infringed the laws of anti-money laundering and counter-terrorism.

The sanctions follow a thorough review by a third-party consultant. The examination is performed by the banking regulator revealed the high risk and repeated AML/CFT breaches from the company and operational failings from the board of directors.

The central bank did not reveal the identity of the concerned company. According to the regulator, “The findings illustrate that the finance company engaged in high-risk, repeated violations and had an overall weak compliance culture relating to policies and procedures designed for AML/CFT.”

UAE, the world’s second-largest economy,  has recently introduced several initiatives to regulate the financial sector. The government and the authorities have passed strict laws to prevent money laundering and terrorism financing and also have imposed regulations over the years to clamp down on financial crimes.  

Last month, the bank issued multiple guidance for licenced FIs, including banks, exchange houses, finance firms, insurance organisations, brokers and agents, to counter financing of terrorism and money laundering.  

The guidelines focus on using digital identification systems by licenced financial institutions to address CDD (Customer Due Diligence) responsibilities.

In 2021, UAE established the Executive Office for AML/CFT, an agency that deals with fraudsters and organisations suspected of financing terrorists and organised crime.

Also in 2020, the Ministry of Economy set up an Anti-Money Laundering department, ensuring all non-financial businesses and professionals comply with the laws.

The banking regulator instructed the finance company to address its compliance failures, directing the BODs to meet and rectify the issues related to the composition. UAE Central Bank works to ensure all finance organisations, their owners and staff follow the country’s laws, standards and global regulations to protect the transparency of concerned businesses and the financial system of the Emirates.

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UK Issues Crypto Framework for ICOs, Stablecoins, Exchanges and Regulators

UK Issues Crypto Framework for ICOs, Stablecoins, Exchanges and Regulators

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The report covers crucial aspects of crypto regulation, aiming to foster growth in the sector with a clear understanding of the risks involved in digital assets.

The United Kingdom issued their well-awaited regulatory framework for crypto regulation on Wednesday, 1st February 2023,  drafting the administration’s choice of the regulator to supervise the industry, covering careful guidance on stablecoin type, rules for ICOs, exchanges, custody, and other critical regulations for digital assets.

“Our objective is to establish a proportionate, clear regulatory framework which enables firms to innovate at pace while maintaining financial stability and clear regulatory standards,” wrote Andrew Griffith, Economic Secretary to the Treasury. 

“This includes a proposal to bring centralised crypto asset exchanges into financial services regulation for the first time, as well as other core activities like custody and lending.”

The regulatory framework summarised in the report seeks to accomplish four overarching policy goals: Foster growth, innovation, and competition in the UK; enable consumers to make well-informed decisions with a clear understanding of the risks involved; protect UK financial stability; protect the UK market integrity.

The Treasury said the framework also adheres to a set of core design principles:

“Same risk, same regulatory outcome,” meaning the government will remain “technology agnostic” when determining whether digital assets increase or mitigate risks, “but the aim is to achieve the same or a very similar regulatory outcome” whenever possible.

“Proportionate and focused,” meaning they will focus attention on “where the risks and opportunities are most urgent or acute” and will do their best to avoid “disproportionate or overly burdensome regulation” to crypto entities.

“Agile and flexible,” meaning any regulation should “accommodate evolving markets and products” and should “enable regulators to adapt to changes in the market and developments in international standards.” The regulatory framework is also planned to be “consistent” with the Future Regulatory Framework (FRF) to be launched by the Financial Services and Markets Bill 2022 (FS&M Bill). It should also be harmonised with regulations in other jurisdictions.

The essential legislative method will be to place the financial services regulation of crypto assets “within the regulatory framework established by the UK’s Financial Services and Markets Act 2000 (FSMA), taking advantage of the confidence, credibility and regulatory clarity that this existing system affords, and as it is intended to be updated by the FS&M Bill.”

The report stated that “developing a fully bespoke regime outside of the FSMA framework was also considered,” but they chose against it as this would create a “level playing field” between crypto and traditional financial services firms, would infringe the “same risk, same regulatory outcome” principle, and would likely make “overlapping regulatory regimes and confusion for market participants.”

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FinCEN Alerts FIs of Sanction Evasion by Russian Entities Implicated in U.S. Commercial Property Investments

FinCEN Alerts FIs of Sanction Evasion by Russian Entities Implicated in U.S. Commercial Property Investments

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FinCEN alerted all the Financial Institutions warning about the risk of investment from sanctioned Russian elites.

FinCEN (Financial Crimes Enforcement Network) issued an alert to financial institutions on 25th January 2023, mentioning the risk of investment by Russian oligarchs, elites and their families in real estate.

 The report is an update to the previously published alert from March 2022 regarding the ongoing conflict in Ukraine. This alert marks the sector on notice that financial firms are monitoring the commercial real estate sector for instances of money laundering and evasion by the sanctioned Russians.

The report identifies several weak points that expose the US commercial real estate market to potential sanction evasion. Here are some vulnerabilities noted by FinCEN:

  • The stability of the U.S. commercial real estate market and its high-value commercial real estate properties make such investments ripe for generating steady income and storing large volumes of illicit wealth.
  • Commercial real estate transactions implicate complicated financing methods that lack transparent ownership structures.
  • Lack of transparency can supply a conveyance for fraudsters to suppress illegal funds within commercial real estate investments.

In addition to mentioning the reasons for additional diligence, FinCEN also highlighted some red flags for real estate transactions.

  • The buy, sale, contribution, or legal ownership transfer of a high-value real estate in place of a foreign legal entity, shell company or trust, especially if the transaction: (i) is far above or below fair market value, (ii) involves all-cash transfers, or (iii) is funded by a third party with a known nexus to sanctioned Russian elites and their proxies.
  • Using permitted commodities or arrangements with a nexus to sanctioned Russian elites and their proxies to disguise the real beneficiary or fund’s roots or sources.
  • Modifications, without an evident business reason, to the transaction patterns of a firm located in a country other than the United States, Russia, Belarus and Ukraine, where the new transactions involve convertible virtual currency and Russian-related investments or firms.

The latest alert from FinCEN focuses on these red flags; the Department of Justice’s OFAC (Office of Foreign Assets Control) has been tracking the channels since the Russian sanctions took effect last year. It also provides due diligence guidance for FIs, insurance firms, and other parties that perform commercial or real estate transactions. 

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FINTRAC Issues Alert on Money Laundering from Illegal Wildlife Trade

FINTRAC Issues Alert on Money Laundering from Illegal Wildlife Trade

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FINTRAC, in collaboration with the Project Anton team, issues an alert on money laundering proceedings from illegal wildlife trade.

FINTRAC has published a new operational alert to counter money laundering and proceeds of crime from illegal Wildlife trade which assists businesses subject to money laundering and terrorist financing to identify and report financial transactions associated with illicit wildlife trade. 

This reporting will facilitate the production of actionable financial intelligence supporting law enforcement investigations of this horrendous and vicious crime in Canada and abroad.

FINTRAC’s operational alert was created in backing of Project Anton, a new international public-private cooperation aimed at improving understanding and awareness of the global threat posed by illegal wildlife trade, targeting despicable crime domestically and internationally. The project was named in honour of Anton Mzimba, the head of security at the Timbavati Private Nature Reserve and a Global Conservation Technical Advisor who was killed in 2022 while protecting and conserving wildlife. 

Illegal wildlife trade is a significant threat to biodiversity and the global environment, species that are already rare, habitats, communities and livelihoods. 

FATF (Financial Action Task Force) also has identified wildlife trade as a major transnational crime that produces billions for criminal proceedings every year. According to the Wildlife Justice Commission news, illegal wildlife trading is a low-risk and high-reward criminal activity that often involves fraud schemes and tax evasion. 

In addition to money laundering and organised crime, human, drug, and weapon trafficking, and associations that deal in wildlife crime typically engage in other forms of crime.

Many officials from notable firms commented on illegal wildlife trade and its association with heinous crimes such as trafficking and money laundering.

According to Sarah Paquet, Director and CEO of FINTRAC, “Illegal wildlife trade is an appalling and merciless crime committed for financial gain and to advance other criminal enterprises. It threatens our environment, public health, prosperity, and the safety and security of our communities. Together with our dedicated Project Anton partners in Canada and around the world, we are determined to follow the money and leverage the power of financial intelligence to help target, disrupt and dismantle the organised criminal networks that profit from this insidious illicit activity.”

Nicole Rose, Chief Executive Officer, AUSTRAC said, “Criminals rely on financial services to enable their activities, whether drug, human or wildlife trafficking. AUSTRAC’s Fintel Alliance pools the diverse capability of government agencies and financial institutions to generate financial intelligence to disrupt crime and has led to the targeting of transnational organised crime syndicates trading in illegal wildlife. Initiatives like Project Anton reinforce the impact that close cooperation between governments and industry can have in combating crime.”

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UK Government to Crackdown Corruption Under New AML laws

UK Government to Crackdown Corruption Under New AML laws

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Overseas firms owning land in the UK need to publicly declare the owners, under the new UK laws to crack down on money laundering and corruption from real estate.

The government recently announced that overseas firms with unregistered beneficial owners and companies housed in the UK will be charged penalties such as sale restrictions or hefty fines. Foreign firms were required to declare their beneficial owners by Tuesday, 31st January 2023, under the new AML measures introduced by the authorities to flush out corrupt elites.

Now that the deadline has passed, the firms that have not provided data to Companies House, UK’s government agency, could charge them with sanctions, including prosecution or financial penalties. 

The register was added for strict economic measures announced in response to Russia’s incursion into Ukraine, targeting illegal assets supporting the Putin regime. The new law also exposes criminals that use overseas firms to move money. Recently, the “Cryptoqueen”, Dr Ruja Lgnatova, a most wanted scammer was publicly declared the beneficial owner of two intermediaries in Guernsey because of new requirements. 

Business Minister Lord Callanan revealed, “There is nowhere for the criminals and corrupt elites to hide. We will be using all the tools at our disposal, including fines and restrictions, to crack down on foreign companies who have not complied.”

The firms which are not registered already get rejected automatically from registering ownership of any new land by the HM Land Registry. Any UK buyers will not be able to move the title to the deed of any land bought from non-compliant firms. 

The Companies House is now evaluating and scheduling matters for enforcement actions. The further regulations will also empower Companies House to impose fines on land owned by non-compliant organisations and pursue other lawful avenues. 

Companies House and Insolvency Service will also earn improved controls from Economic Crime and Corporate Transparency Bill. With an investment of up to £20 million of allocated spending, both firms will recruit new teams of analytical experts to improve the capability of tackling money laundering. 

Louise Smyth, CEO of Companies House, said, “The implementation of the Register of Overseas Entities has been another huge step forward in the transformation of Companies House and our role in helping combat economic crime.”

“We cannot be clearer in our message to these entities; if you ignore warnings and fail to register before the deadline, you will face consequences. This includes not only the prospect of restrictions on your land or property but also a possible fine, prison sentence, or both,” he added.

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South Korean Government to Enforce Cryptocurrency Transaction Monitoring in H1 2023

South Korean Government to Enforce Cryptocurrency Transaction Monitoring in H1 2023

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The South Korean government is looking to implement crypto oversight by tracking transactions to prevent crypto-related crimes. 

According to the source, the Ministry of South Korea had introduced new plans to implement a cryptocurrency monitoring system to counter illicit crypto transactions. Citing the report, the new program is named “Virtual Currency Tracing System”, which aims to track all the investors and collect other user-identifiable data. 

The ministry has plans to launch the system soon, however, the complete launch is not expected until the half of this year, i.e, 2023. The official statement from the government reads that these new additions to the system are crucial to guard against increased cybercrimes. With the new forensic tracking system, the authorities hope to enforce a solution that is compliant with international rules and standards. 

This new system is just one of the latest implementations of South Korea in its crypto-tracking policy. The nation is experiencing a remarkable rise in crypto adoption and the government is working to ensure that the transactions are legal and do not leave a loophole for hackers to breach. 

In October 2022, a local news source reported that the FSC (Financial Services Commission) would commit to tracking the big crypto fishes with over 100 million (about $70,000) won in their holdings to counter money laundering. 

As the watchdog explained, having large proportions of crypto and stablecoins automatically equates to a higher risk of money laundering. Thus, more emphasis is required on monitoring crypto wallets with large amounts of traditional crypto and stablecoins to comply with AML (Anti-Money Laundering) policies.

The FSC was especially critical of stablecoins, which members of the public use. In a statement, the agency mentioned that many of these independently listed assets do not meet the criteria for other virtual asset operators.  

The report also advocates overseeing retail customers who make high-value deposits besides monitoring crypto whales and their financial activities. These customers should be tracked to check for any major changes in the holdings at least every quarter.

The authorities have also examined the crypto exchanges that list their native tokens. After the FTX collapse, KoFIU (Korea Financial Intelligence Unit) reportedly investigated many other crypto platforms, looking into those that had listed, naively developed coins.  

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FINRA Issues its Examination and Risk Monitoring Program Report 2023

FINRA Issues its Examination and Risk Monitoring Program Report 2023

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FINRA published its 2023 report on its Examination and Risk Monitoring Program, covering all the major aspects of trading, pricing, shares and regulation.

FINRA (Financial Industry Regulatory Authority) published its 2023 risk examination and monitoring report on 10th January 2023. The report covers the four new topic areas for the mentioned year.

  1. Manipulative Trading
  2. Fixed Income – Fair Pricing
  3. Fractional Shares, Reporting and Order Handling
  4. Regulation SHO

The report also added a new financial crime section, consisting of three topics, i) AML (Anti-Money Laundering), fraud and sanctions, ii) Cybersecurity and technological governance, and iii) manipulative trading.

While the report covers over 20 regulatory areas, it continues the trend from last year’s report on emphasising market integrity The new four referenced topics focus on market integrity, and organisations should expect strict scrutiny in these areas. 

Firms also need to ensure the best execution and compliance and should expect continued attention to the order routing disclosure requirements Rule 606 of regulation NMS. Finra will keep on focusing:

The quality of “regular and rigorous reviews” affects the broker and dealer routing decisions. The potential conflicts of interest that cover internalised order executions.

FINRA will pay particular attention to cybersecurity issues, as the addition of an entirely new section in the report indicates. It is no surprise that FINRA’s concern on cybersecurity issues is mandatory in light of increasing cyber attacks on firms. The FIs can expect the authority to examine all the risk management controls and other security, authentication, and surveillance mechanisms closely in order to prevent these cyberattacks. 

Also, CAT reporting compliance will remain a focal point in 2023, and firms should be prepared for the upcoming CAIS (Customer and Account Information System) reporting deadlines. Firms should be prepared for Reg BI compliance examination to keep clear as the report mentions that FINRA expects the organisations to regularly update their approach to Reg BI and Form CRS compliance. 

The report aims to provide necessary guidelines to the broker-dealers to prepare for examination and review and also to assess compliance and supervisory procedures related to the business practices, compliance and operations. It is an important preview of the areas that may garner the interest of FINRA enforcement. 

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North Korean Hackers Attempt to Launder ETH Worth $27M from Harmony Bridge Attack

North Korean Hackers Attempt to Launder ETH Worth $27M from Harmony Bridge Attack

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North Korean hackers behind the Harmony Bridge attack continue to attempt to launder crypto funds stolen in June 2022. As per the data reported on January 28, 2023, the preparators tried to transfer 17,278 Ether, worth about $27 million.

According to the source, the Ethereum tokens were moved to six different crypto exchange networks without verifying the platforms receiving the tokens. Three main addresses carried out the transactions. 

The exchanges were notified about the funds and also about the freezing of stolen assets. The transactions made by the exploiters were very similar to the attempt made on January 13, 2023, when more than $60 million was laundered. 

The movement was done a few days after the FBI (Federal Bureau of Investigation) confirmed that the Lazarus Group and APT38 were the criminals behind the $100 million hack. The FBI mentioned in a statement, “through our investigation, we were able to confirm that the Lazarus Group and APT38, cyber actors associated with the DPRK [North Korea], are responsible for the theft of $100 million of virtual currency from Harmony’s Horizon bridge.”

Harmony’s Horizon Bridge facilitates the transfers between Ethereum and Harmony network, Bitcoin and Binance chain. On June 23, 2022, many tokens worth millions of dollars ($100 million) were stolen from the platform. 

Following the exploit, Tornado Cash Mixer was used to process 85,700 Ether and was deposited at multiple addresses. On 13th Jan, criminals began to shift over $60 million worth of stolen funds through the Ehterum-based privacy protocol RAILGUN. According to the analysis over 350 addresses have been associated with the attack through the exchanges in a shot to escape verification. 

Lazarus has been implicated in several major crypto breaches and is a well-known hacking syndicate. In March 2022, the group was involved in the $600 million Ronin Bridge hack.

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Panama’s Supreme Court to Declare Cryptocurrency Legislation

Panama’s Supreme Court to Declare Cryptocurrency Legislation

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Panama’s Supreme court to decide whether to modify the “crypto bill” or approve it without amendments.

Panama’s cryptocurrency bill has reached a new update, with the supreme court ready to decide the future of the local crypto industry.

On January 26th, 2023, Panamanian President Laurentino Cortizo forwarded the crypto legislation to the high court for review, stating the so-called “crypto bill” violates the constitution’s principles and is unenforceable.

The supreme court must now decide whether to approve Bill No. 697 unenforceable or with modifications. 

According to the official statement, articles 34 and 36 of the bill disobey the state’s separation of powers and specify administrative structures with the government. It is the reason the president’s office considers the bill unenforceable.

President Cortizo also mentioned the bill’s approval via insufficient procedures following his partial veto of the legislation in June 2022. At that time, the president argued for more improvements to the bill to comply with the new regulations of the Financial Action Task Force (FATF) aimed at preventing money laundering and adding fiscal transparency. 

The dispute between the Panamanian government and the National Assembly has centred on this bill. In April, the lawmakers introduced a new legislative proposal aiming to regulate the cryptocurrencies in Panama, including Bitcoin. However, the President warned a few weeks later that he would only approve the legislation if it covered the additional AML (Anti-Money Laundering) rules.

The bill was announced in September 2021 and aimed to make the nation “compatible with the digital economy, blockchain, crypto assets and the internet.” It was moved out of the Economic Affairs Committee on April 21 and was approved a few days later. 

Based on the legislation, Panamanians “may freely agree on the use of crypto assets, including without limitation Bitcoin and Ethereum” as an alternative payment for “any civil or commercial operation.”

Furthermore, the bill would regulate the tokenisation of precious elements and the issuance of digital value. The government’s innovation authority will also explore the possibilities of digitising identity using the blockchain or distributed ledger technology.

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FCA Hints Why only 15% of Crypto Firms Received Regulatory Approval

FCA Hints Why only 15% of Crypto Firms Received Regulatory Approval

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The UK financial watchdog has approved only 41 registration applications of crypto firms out of 300 applicants.

Despite all the programs to turn the region into a crypto hub, UK’s FCA (Financial Conduct Authority) has only cleared 41 registration out of 300 crypto firms seeking regulatory approval to operate. 

The UK watchdog implemented new crypto-focused regulations on 10th January 2020 just to supervise the existing firms operating in the sector to ensure AML (Anti-Money Laundering) and CTF (Counter-terrorism Financing) compliance in traditional financial markets. 

A statement from FCA has revealed that out of 265 applications that were “determined” only 15% of applications were approved by the authority, 74% of firms either refused or withdrew the application, while the 11% were rejected. Other 35 applications are yet to be analysed and determined. 

While the FCA did not mention the actual cause of rejecting the licensing, it did provide feedback on “good and poor quality” applications. 

Incomplete applications were more apparent when the firms used these to promote their products and services, particularly in cases when the application process was still ongoing.

“Applicants’ websites and marketing material must not include language that gives the impression that making an application for registration is a form of endorsement or recommendation by the FCA.”

The reports suggest that some firms have had their applications scrapped if they couldn’t show reliable operations sufficient enough to comply with regulatory protocols. The FCA also doubled its AML stance, demanding that all firms appoint a money laundering reporting officer who is “fully involved” in the application process. 

The UK’s watchdog also stressed that even firms that had their registrations approved do not mean they are free from obligations. 

“Applicants must recognize that being registered is not a one-off formality or a tick-box exercise without any further obligations or interaction with the FCA.”

“This feedback should help applicants when they prepare their application for registration and help make the process as simple and efficient as possible,” the note summarised.

Firms registered under the FCA thus far include Crypto.com, Revolut, CEX.IO, eToro, Wintermute Trading, DRW Global Markets, Copper, Globalblock, Moneybrain, and Zodia Markets. 

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Dutch Central Bank Strikes Coinbase with €3.3 Million Fine over Anti-Money Laundering Failings

Dutch Central Bank Strikes Coinbase with €3.3 Million Fine over Anti-Money Laundering Failings

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The Dutch Central Bank (DeNederlandscheBank) has charged Coinbase for having ineffective anti-money laundering checks.

Coinbase, the second largest crypto exchange network by volume, has been fined €3.3 Million ($3.58 Million) by the Dutch Central Bank (De Nederlandsche Bank) over a lack of compliance with local regulators and crypto transactions to unregistered customers in the country. 

According to DNB, “The fine was imposed because Coinbase provided crypto services in the Netherlands in the past without registration with DNB, which is in non-compliance with the law.”

All firms aiming to run crypto services in the Netherlands should register with DNB first as per the rules of the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act. Coinbase is charged with a “category 3 fine,” according to which the base amount is €2 million. The figure was raised “due to the severity and degree of culpability of the non-compliance.”

DNB handed €3,325,000 fines for several reasons, including that “Coinbase has a significant number of customers in the Netherlands that make use of its crypto services.”

Adding to the fact that Coinbase is one of the renowned names in the crypto services industry, the bank also raised the fine, 

DNB Stated, “Coinbase has enjoyed a competitive advantage in that it has not paid any supervisory fees to DNB or incurred other costs in connection with DNB’s regular supervision activities.”

The non-compliance from Coinbase was also considered “very severe” by the bank’s authority since it persisted from 15th, November 2020, until the end date of DNB’s examination which was 24th Aug 2022. 

The Netherlands first announced the registration requirement for crypto service providers on 21st May 2020, “due to the high risk of money laundering and terrorist financing associated with crypto services.”

The registration requirement also allows DNB to track risks of illegal financial activity flows more efficiently. 

By failing to obtain registration on time, Coinbase could not report any unusual transactions to FIU (Financial Intelligence Unit) Netherlands before the date. “As a result, a large number of unusual transactions may have gone unnoticed by the investigative authorities during this period,” DNB said.

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Gambling Commission Imposed a £6.1 Million Fine on Touch Games for Money Laundering Failings

Gambling Commission Imposed a £6.1 Million Fine on Touch Games for Money Laundering Failings

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The Touch Games, a gambling firm that operates 11 websites, has been fined £6.1 million over failings on social responsibility and money laundering failings.

According to the gambling commission, the Touch Games, a gambling service provider that operates eleven websites including bonusboss.co.uk, cashmo.co.uk, drslot.co.uk, jamymonkey.com and slotfactory.com, has been fined £6.1 million ($7.5 million) for money laundering and social responsibility failings.

The responsibility failures include business’s lack of social interaction with customers. The sources report that the firm did not interact with a customer for seven weeks after they had been flagged for erratic and extended play, also accepting customer’s word that they earned £6,000, without any verification, until they were flagged for gambling during unsociable hours. 

AML (Anti-money laundering) failures include not having proper policies, processes and procedures in house controls, that were insufficient considering or implementing the regulator’s money laundering and terrorist risk financing assessment or guidance. 

This is the third time Touch Games has faced regulatory action. Previously, in 2019, the firm paid £2.2 million settlement for failures and also, in 2021, it received a £3.4 million fine and a warning of further failures.

The Executive Director of Operations at the Gambling Commission, Kay Roberts said, 

“Considering this operator’s history of failings we expected to see significant improvement when we carried out our planned compliance assessment.”

“Disappointingly, although many improvements had been made, there was still more to do.”

“This £6.1 million fine shows that we will take escalating enforcement action where failures are repeated and all licensees should be acutely aware of this.”

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Binance Resorts to Shady Crypto Firms as Authorised Options Run Short

Binance Resorts to Shady Crypto Firms as Authorised Options Run Short

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Binance, the global crypto exchange leader, retract to shady asset companies as authorised options minimise.

Any reputable firm never backs shady crypto firms. These payment providers are forced to flip from one dark company to another as each subsequent member either cut ties or is disassembled by law enforcement authorities.

The firms involved in this are not small shops, they might be the most giant corporations in the industry. Binance, this week, was cut off from its US banking partner, Signature Bank, in between the reports that the famous crypto giant’s clients could not withdraw the funds from the platform. 

Also, before this latest incident, Crypto Capital Corp, a Panamanian offshore firm was found guilty of money laundering and financial fraud. The US watchdogs seized funds nearly billion dollars it was holding for abundance and digital asset clients. 

Crypto capital had become the payment processor as a last resort for digital asset companies that couldn’t convince any reputable firm to support them. Tether/Bitfinex were among the most notable clients which were scrutinised by New York AG in 2020 and 2021 because of its association with the Crypto Capital. 

The investigations further revealed that Bitfinex had invested almost a billion dollars into the Crypto Capital and it is predicted that US authorities seize the whole amount over money laundering controls. The executive team was indicted and moreover, the firm’s clients were left in the gaping hollow where their reserves used to be. 

As a whole, this gives Crypto Capital a place in digital asset history because the New York AG’s investigation revealed that Tether used its reserved budgets to back Bitfinex out of this pit, which proves that Tether had long been indicted of, and also the stablecoin is also not fully backed by the reserves. 

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AMLA Adds New Protections and Financial Incentives for US Whistleblowers

AMLA Adds New Protections and Financial Incentives for US Whistleblowers

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Anti Money Laundering Act 2020, has amended the recently enacted AML whistleblower improvement act, which significantly expanded the legal protections and financial incentives for whistleblowers to report AML violations.

FinCEN (Financial Crimes Enforcement Network) will soon propose regulations to implement the new whistleblower provisions. FIs (Financial Institutions) and other firms that comply with AML and sanctions should evaluate their existing internal whistleblower programs to ensure compliance with the new law and encourage employee whistleblowing.

The maximum award has been increased for eligible whistleblowers that voluntarily provide original information to the treasury department, DOJ or employer. Under the initiative, whistleblower awards were capped at $150,000. Whistleblowers are eligible for awards not less than 10% and 30% of financial sanctions gathered by the government for AML and sanctions violations. The enforcement actions have resulted in penalties worth millions. In several recent cases, the penalties exceeded $1 billion. 

Employment protection for whistleblowers is also included in AMLA. For instance, the act prohibits employers from discriminating against whistleblowers in terms and conditions of employment because of any lawful action by the Whistleblower in providing information to FinCEN, DOJ, or any other member of the committee. 

The Act also protects the Whistleblowers that provide tips on the misconduct of a person with the supervisory authority to investigate or terminate the misconduct. 

This way, AMLA protects internal and external whistleblowing by employees. 

Relief for individuals who prevail in complaints with the Department of Labor or in Federal lawsuits includes,

  1. Reinstatement with the same seniority level that the individual would have had but for the criminal retaliation.
  2. Two times the misconduct amount of back-pay otherwise owed to the individual, with interest.
  3. Compensatory damages must carry litigation amounts, witness charges and reasonable attorney’s fees. 
  4. Another appropriate remedy with respect to the conduct is also the subject of the complaint as applicable. 

As updated, the AMLA and FinCEN’s impending rules will dramatically improve the whistleblower roles under US AML sanctions and laws. FIs and other firms will also revise their internal programs to minimise any impasse laws and regulations on their operations. 

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NYDFS Reminds BitLicense Holders to Follow Rules

NYDFS Reminds BitLicense Holders to Follow Rules

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NYDFS (New York Department of Financial Service) has restated custody and disclosure requirements for BitLicense holders and limited purpose trust charter. 

The New York’s department of financial services has put up the most onerous operating requirements for digital asset firms on notice. The new revisions require the firms to comply with KYC (Know Your Customer), AML (Anti Money Laundering) and Capital standards. 

Also, due to high-profile meltdowns and crypto lender bankruptcies, New York’s department appears to be bearing down on the industry. Firms having licences and charters that can operate in the state include Coinbase, Circle Internet Financial, Fidelity, NYDIG, Paxos, PayPal, Robinhood, and SoFi Digital Assets. 

Another exchange, Gemini, remains to be seen after the securities and exchange commission’s complaint.

NYDFS in the last 12 months, levied its first-ever crypto-related enforcement actions against Robinhood, which paid a fine of $30 million, and the latest is a Coinbase settlement of $100 million. 

Meanwhile, the New York AG (Attorney General) Letitia James sued Alex Mashinsky, earlier this month. The founder of Celsius Network was alleged of defrauding investors out of billions of dollars in digital asset funds. 

“Today’s guidance reminds DFS-regulated virtual currency companies of our expectations regarding the safekeeping of customer assets,” superintendent Adrienne Harris said in a press statement.

Among the reiterated rules, here are some critical highlights for Bitlicence holders:

  1. Preserving customer funds segregated from corporate assets.
  2. Ensuring customer funds usage by restricting use for making a debtor-creditor relationship.
  3. Mentioning clear and transparent terms of use for custodial agreement.

NYDFS could end up taking a bigger part in managing restructuring or liquidation proceedings, such as:

  1. The banking law grants Harris the authority to take possession of the banking firm’s business and property under the condition that it was insolvent. 
  2. Trust firms are considered banking firms under the law.

The New York Department of Financial Services is also working on the guidance of stablecoins, consumer protection and advertising disclosure requirements.

Suggested Read:

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US Regulators to Sharpen AML Expectations For Crypto Sector

Coinbase Agrees to $100Million Settlement with NYDFS for AML Violations

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