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Fraudsters Target UK’s £400 Energy Bill Support Scheme through Scam Texts

Fraudsters are taking advantage of the support program initiated for people to lessen the burden of soaring electricity and gas prices. Using links of a fake website, scammers urge people to hand over their personal information and bank details. 

The UK government warns citizens about a fake text message fraud that’s spreading to loot innocent people. The fraudsters claim to be a part of the government. This text scam invites people to apply for the £400 energy bill support scheme and get some relief in their bills. 

Scammers took advantage of new support that has been put in place as a part of the package of measures set to lessen the burden of increasing electricity and gas prices. 

Kicked in on 1 October, the energy price guarantee limit the rise in gas and electricity units’s cost lower as compared to their market value for protecting consumers. It’s automatically delivered through suppliers. 

Whereas in the elctrucity bill for the month of October, households will receive instalment of the £400 Energy Bill Support Scheme. For most of the users, the support of £400 will be applied monthly in six instalments from October 2022 to March 2023 with those who pay through debit seeing it deducted from their energy payments.           

Fraudsters are taking advantage of the scheme with messages that urge people to “apply.” They are give fake links and representing themselves as government officials.  There, people are urged to give their personal data including bank information. 

Offciials gave a warning and said that they have received 139 reports about scam text messages. They said, “You do not need to apply for the scheme, or provide any bank details.”

The government warned people to stay alert to such fraudulent messages. According to officials, “There is no need to apply for the schemes, with most customers receiving today’s support automatically through their electricity bill.”

Jacob Rees-Mogg, Business and Energy Secretary said, “I urge people today to stay alert to scams. This support will reach people automatically and there is no need to apply.”

He said that it was an extraordinary financial help offered to people that will protect businesses as well as households “across the country from what was going to be an 80 per cent increase in energy bills this winter”. Consumers have been told to report any such scam to 7726. 

Suggested Read: Gamers Must Be Aware of long-Scale Click Fraud Campaign- Says Microsoft

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Singapore Police Warn Citizens of Prevailing SMS Phishing Scams

The Singapore Police Force has warned citizens about SMS fraud targeting people with similar sender IDs. 

The public has been advised not to share their credentials in response to any SMS with web links asking recipients to login into their accounts and share their passwords.

On Sunday, the Singapore Police Force (SPF) warned people about an SMS phishing scam targeting victims with similar sender IDs. Scammers apply sophisticated fraudulent techniques to obtain the Singpass users’ login credentials. 

The police said that proliferating cases regarding monetary scams are a sensitive matter. In these scams, people receive unsolicited SMS with the Sender’s ID that contains similarities to Singpass like MySingpass or SGSingpass.

In SMSes, it’s shown that the Singpass accounts of the recipients had been or will be deactivated soon. So the recipients must conduct a facial verification process for which they must log into Singpass through a web link that scammers provide in the messages. 

When a person clicks on the link, they are directed to a Singpass login webpage and require credentials such as a Singpass ID and password.

After that, they are required with a two-factor authentication page that asks for the Singpass one-time password. People only realise that they have been scammed when they receive an alert from Singpass regarding the upgradation of their profile or a notification that they had signed up for bank accounts.

The police said, “While the authorities have taken down the phishing websites, user vigilance is crucial in our fight against evolving scams.”

Authorities addressed the issues and said, “The police and GovTech would like to advise members of the public to be on heightened alert.”

The public has been advised that Singpass doesn’t send any SMS with web links asking recipients to login into their accounts and share their credentials, such as passwords and one-time passwords; that’s why people should not share their personal data in any way. 

“If you suspect that your Singpass account has been compromised, reset your Singpass password immediately,” said the police.

Users have been advised to update their contact details and enable notifications through their Singpass app to get an immediate alert in case of any suspicious login. 

Suggested Read: Danske Bank Fined €1.82m Over AML and CTF Breaches

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EU Lawmakers Propose New Bill to Combat Money Laundering through NFTs

Members of the European Parliament have proposed a new bill to increase scrutiny of the NFT and DeFi sectors in the fight against money laundering.

The European Parliament is considering an overhaul of the EU money laundering laws proposed by the European Commission last year, a draft bill shows. The draft is couched as a set of “compromise amendments” to the law, designed to get consensus opinions among various political factions.

The European Parliament will be incorporating a left-wing lawmaker idea from earlier this year by including DeFi within the law’s scope.

The text says DeFi and the decentralized autonomous organizations governing it should also have to follow rules establishing control by the EU in some ways.

“Developers, owners or operators should assess risks of money laundering and terrorist assessments before launching or using a software or platform,” it added.

In addition, money laundering authorities have tried to outlaw the use of privacy-enhancing services like Tornado Cash over fears that such services will be used to process criminal money and prop up regimes like North Korea’s.

The plan would see a list of “obligated entities” covering banks, real estate agents and diamond traders, and would extend to wallet and crypto service providers regulated under the EU’s separate Markets in Crypto Assets Regulation (MiCA). 

Traders accepting crypto payments for goods and services worth over 1,000 euros, along with those trading or mining NFTs, may also be forced to check identities and report suspicious transactions.

PYMNTS wrote recently that two lawsuits by the Commodity Futures Trading Commission (CFTC) could completely change the industry and make projects “ungovernable.”

The lawsuits could threaten those participating in the governance voting with liabilities.

The issue arose in a lawsuit against DeFi exchange developers bZeroX and its founders, which resulted in them taking a $250,000 settlement for not registering as Futures Commission Merchants and not enforcing various regulations such as KYC rules.

Suggested read: European Commission to Negotiate Scope of NFTs & Private Wallets in Crypto Regulation

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FINRA Issues Guidelines Regarding Penalties for Anti-Money Laundering Violations

FINRA has issued its first-ever guidance to its member broker-dealers about the penalties that will be imposed for violating anti-money laundering rules.

Issued on Thursday, the guidelines from Finra are aimed at stepping up the scrutiny of member companies’ anti-money-laundering efforts.

As per the new guidelines, FINRA could impose a fine ranging from $10,000 to $310,000 for small firms that haven’t implemented monitoring measures to report suspicious transactions. 

Fines for the same violation that could be imposed on medium and large firms start at $50,000 and have no upper limit, FINRA said.

Compliance with AML regulations under the Bank Secrecy Act has been a continuing focus of Finra’s enforcement efforts, a spokeswoman said in an email, referring to the regulator’s actions against Interactive Brokers LLC, BNP Paribas SA and Morgan Stanley.

“By creating specific AML guidelines, Finra has provided greater transparency and relevant factors that identify when AML violations are more serious and should result in higher fines,” she added.

In recent years, Finra fined Interactive Brokers $38 million, BNP Paribas $15 million and Morgan Stanley $10 million over anti-money-laundering issues.

Emily Gordy, a partner at law firm McGuireWoods LLP and a former enforcement official at Finra, said in an email that while much of this information was available through a survey of cases the agency has worked on over the years, it was important to bring it all together. 

“The industry and practitioners don’t have to go on a ‘treasure hunt’ to find the relevant information,” she added.

Apart from fines, FINRA said it would also consider suspending or even expelling firms for certain wrongdoing. In cases where Finra finds a firm’s anti-money-laundering program deficient, the agency recommends fines of $10,000 to $100,000 for small firms and $20,000 to $310,000 for midsize and large firms. 

The factors it takes into consideration when imposing a fine include the nature, size and risk profile of the firm’s customer base.

Suggested read: FINRA Issues Notice to Remind Firms of Nation-wide AML/CFT Priorities 

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IMF Urges Central Bank of Seychelles to Upgrade Transparency and AML Controls

The Central Bank of Seychelles (CBS) has been advised by the International Monetary Fund (IMF) to have transparent practices and AML controls. 

The International Monetary Fund (IMF) has urged CBS, the Central Bank of Seychelles, to incorporate refined practices in different accountability and governance areas. These include confidentiality, supervisory & confidentiality policies along with internal AML/CFT protocols. 

According to the statement by IMF, CBS is giving information regarding legal structure, mandate, and a few key elements related to anti-corruption arrangements, risk and human resource management, and accountability on its website. 

The review of IMF stated, “To better support the public’s perception of the CBS as a well-governed institution, it should consider highlighting these aspects in its annual report, and/or provide additional information on its website, particularly on human capital management, anti-corruption policies and decision-making arrangements.” 

As per IMF’s review, CBS needs to work on several elements, including information’s accessibility to its internal governance arrangements. It could be done by maintaining the Annual Report’s respective sections and website. Moreover, it must overhaul the proceedings by publishing its Code of Conduct and Ethics.

“The legal mechanism for confidentiality issues has been established, but the dissemination and disclosure of the confidentiality framework could be enhanced. The CBS discloses basic information on its AML/CFT supervisory powers and policies, as well as on its related internal control framework, but disclosures on the processes and outcomes of its AML/CFT external policies and internal controls are limited,” said CBS Transparency Code Review of IMF. 

IMF review said that the ensurance of transparency practices with new functions and powers by CBS would be effective for its own benefit. The practices adopted by CBS must comply with the powers acquired by the coming legislative act.

IMF’s CBS Transparency Code Review said, “In the last few years, the CBS’s regulatory powers have been substantially expanded with the adoption of AML/CFT Act and Financial Consumer Protection Act. Moreover, the forthcoming Financial Stability Act is expected to provide a transparent legal basis for the CBS’s (and other financial sector regulators) actions on financial stability. These legislative acts will require an expansion of the CBS’s transparency practices so that the related CBS activities continue to be appropriately disclosed to stakeholders.”

The review aims to identify the strength and improvement areas of CBS by allowing it to evaluate its transparency practices. The review presents the map of CBS’s transparency choices in comparison to several practices in three different categories (core, comprehensive, and expanded). 

Suggested Read: FCA Advises Firms to Embed Data and Technology to Combat Financial Crimes

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PSR Orders UK Banks to Reimburse Customers Tricked by Payment Fraud

PSR has advised UK banks to compensate customers who have been the victims by APP (authorized push payment) scam. 

On Thursday, the Payment Systems Regulator advised the banks to reimburse those customers who have been tricked through Britain’s largest type of payment scam, “authorized push payment” (APP). The regulatory authority proposed that these banks must reimburse the payments over 100 pounds ($107.39). 

According to the regulator, a million pounds per payment will be the amount for the maximum claim. However, several banks have lower limits. The period for the time limit on the claim would not be less than 13 months. 

“Consumers still need to take caution when sending payments, but these proposed measures will have the added protection that most of their larger payments will be automatically protected,” stated the PSR. 

As per the view of regulatory authority, the fraudster’s bank and the bank from which the money was sent will split the reimbursement payment. The cost of processing and fees charged to customers must not be more than 35 pounds. 

The Payment Systems Regulator told that in 2021, bank customers lost 583 pounds in APP scams. Expectedly in 2023, there’s a plan to introduce a new rule if the parliament expands the regulatory authority’s power. 

The new rule will affect several financial institutions, including HSBC, Barclays, Banco Santander, Natwest Group, Lloyds, Banco Santander, and Virgin Money.

The regulatory authority also plans to publish data on the level of fraud and the way the top 25 banks will reimburse affected customers in APP scam. 

Footed by the sending bank, approximately 46% of customers will be reimbursed for authorized push payment scam. According to the expectations of PSR, it would rise to over 95% under the new rule. 

The PSR wants a thorough follow-up regarding the deployment of the rule. The banks will check the name of the person paid through a money transfer between banks. Many financial institutions have already agreed to do so. 

Suggested Read: ePayments Systems Ltd to Permanently Close its Operations Due to Insufficient AML Protocols

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MBSB Bank to Implement BNM’s Requirements for Combating Financial Crimes

Bank Negara Malaysia announced additional security measures for financial institutions to strengthen their systems and migrate from SMS one-time passwords (OTPs) to more secure authentication forms against financial crimes, especially online ones. 

MBSB Bank has been instructed to follow the latest security protocols announced by BNM, Bank Negara Malaysia, to fight financial crimes, especially those that target online transactions. 

According to the chief executive officer of MBSB Bank, Datuk Nor Azam M. Taib, despite having security concerns, financial institutions must act upon the instructed measures to curb scams and protect customers. 

On Sep 27, 23 participants received certificates of completing GRAP, Entrepreneurship Assistance Programme by Nor Azam. He said, “There are no two ways about it. We will follow what is required by BNM.”

On Monday, BNM instructed financial institutions to change their SMS one-time passwords (OTPs) verification method and adopt more robust authentication ways to provide a secure online activity system.  Furthermore, strict fraud detection rules and triggers are needed to block suspected scam transactions.

Restricting customers to one secure device for the process of verification will help in security assurance. The financial industry will receive security advisories highlighting the latest scamming techniques. 

Nor Azam is positive about MBSB’s outlook for this year. According to the chief executive officer, “Our third quarter is doing much better than the first half of the year, and we think the fourth quarter will too. However, for next year, we are not sure how long growth will be sustained because as a small economy, we (Malaysia) will depend on our surrounding environment, which may not be that stable.”

On the Entrepreneurship Assistance Programme initiative, Nor Azam said that the financial institution is planning high-level training for participants. Including different aspects, such as product marketing on e-commerce platforms, the training will help businesses expand their capabilities and grow exponentially.

With 80% of single mothers, most of the participants who received GRAP certificates were PPR Desa Rejang in Setapak, Kuala Lumpur’s residents. 

From February to August 2022, a seven-month training program was arranged for participants. This program covered subjects like emotional well-being, creative mind, sales and marketing, accounting methods, etc. 

Islamic Relief Malaysia collaborated with the GRAP program. Nor Azam said that participants managed to increase by more than 95% in monthly income. 

Suggested Read: Danske Bank Fined €1.82m Over AML and CTF Breaches

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HKMA Fines Cathay United Bank’s Hong Kong Branch with HK$11m

HKMA investigated CUBHK for violating the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The monetary authority has imposed a pecuniary penalty of HK$11m.

HKMA, the Hong Kong Monetary Authority, has imposed a penalty of HK$11m on Cathay United Bank’s Hong Kong branch after completing a thorough investigation.

The HKMA completed the proceedings for Cathy Bank regarding anti-money laundering and terrorist financing protocols. During the on-site examination, the bank was fined for violating the anti-money laundering ordinance during the on-site examination.

The Hong Kong Monetary Authority investigated the case and took necessary disciplinary actions. Acting against AML and CFT laws is a serious issue that can’t be ignored by the monetary authority to avoid any intimidating situation in the future. 

According to HKMA, an on-site examination and investigation found certain deficiencies related to conducting customer due diligence regarding high-risk situations in the time period of April 2012 and February 2016.

CUBHK’s failure to establish effective procedures to carry out its activities under the anti-money laundering laws was shown in the analysis report of HKMA. These duties and activities of the financial institution regarding ongoing customer due diligence and enhanced due diligence during that period were not satisfactory. The financial institution couldn’t take all-inclusive and reasonable measures to ensure strict safety controls to mitigate money laundering or terrorist financing risks.

Carmen Chu, the HKMA’s executive director of enforcement and AML, said, “Senior management oversight is a vital part of effective ML/TF risk management framework of banks. In discharging the relevant legal and regulatory obligations, banks should have a clear understanding of risks and ensure adequate resources to support timely and proactive follow-up of anti-money laundering and counter-financing of terrorism-related issues, with effective coordination across the entire institution. Banks should make reference to the HKMA’s relevant guidelines and circulars in adopting appropriate governance systems for ML/TF risk management.”

An announcement by the Hong Kong government revealed its plans to introduce a variety of financial incentives that will help to address skill shortages in the FinTech sector.

Suggested Read: GIABA to Release Liberia’s AML and CFT Compliance Evaluation Report

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The UK Introduces New Bill to Combat Identity Fraud and Financial Crime

The UK government has launched a bill to prevent the flow of dirty money through its economy by cracking down on fraud and financial crime.

The Economic Crime and Corporate Transparency Bill is designed to introduce widespread reforms aimed at combating economic crime, including one that will force anyone seeking to register a company in the country to verify their identity. 

This is designed to act as a deterrent for those who, in the past, have registered companies solely as a front for criminal activity or foreign kleptocrats.

It is the hope of the bill to “strengthen the U.K.’s reputation as a place where legitimate businesses can thrive while driving dirty money out of the U.K.,” according to the Home Office press release.

Companies House, the U.K.’s company registrar, will be granted the authority to inspect and challenge any suspected fraudulent information, thereby making it “a more active gatekeeper over company creation.”

It is noted to be the “biggest upgrade in 170 years” for the registrar that will allow them to take a more active role in combating fraud and money laundering with the country’s security agencies.

“We want the U.K. to be the best place in the world to invest and start a business, but we must not allow this openness to be exploited by fraudsters misusing the identities of innocent people, or corrupt elites attempting to disguise their dodgy dealings,” said Business Secretary Jacob Rees-Mogg.

It is also mentioned in the proposal that law enforcement will be endowed with stronger investigative powers and the autonomy to compel businesses to hand over information which could be related to money laundering or terrorist financing.

It will further allow bodies such as the National Crime Agency (NCA) to more easily seize and recover crypto assets before criminals can abscond with them.

“The U.K. is no home for dirty money,” said Home Secretary Suella Braverman, who added that the bill will allow police and intelligence services “to stay one step ahead of the criminals intent on keeping their corrupt assets out of reach.”

Suggested read: UK’s FCA Warns Challenger Banks Over Inadequate AML Measures

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Chinese Authorities Bust 93 for Crypto Money Laundering Worth RMB 40 Billion

Chinese Authorities in the Hunan province have busted a criminal ring of 92 individuals for allegedly laundering RMB 40 billion through cryptocurrencies.

​​As China continues its crackdown on financial crime involving digital assets, there have been quite a few cases of money laundering that have made the headlines. 

China has not only ramped up efforts to prevent the use of cryptocurrencies for illegal activities but has also demonstrated progress in regulating the industry as a whole. The country has previously imposed bans on crypto trading, mining, and the use of digital assets for payments. 

The money laundering ring arrested by Chinese Authorities has been led by an individual name Hong since 2018. The group has laundered funds. 

Since 2018, led by an individual surnamed Hong, the suspects had been laundering funds gained from fraud and gambling across the country, according to a Sunday post on the official WeChat account of the Hengyang county police department, which made the arrest. 

The group was reportedly using crypto to convert the funds to U.S. dollars, the post said. Police seized more than 100 mobile phones and computers, RMB 300 million ($41.9 million) of funds and other losses for the victims, the post said.

In other news, Chinese authorities busted a money laundering operation worth 200 million renminbi that made use of its central bank’s digital currency (CBDC).

The operation took place in the Fujian district of the country, local media outlets reported, after law enforcement discovered a clue in August this year.

Once they realized that there appeared to be a money laundering operation going on, the city’s various bodies set up a joint task force to deal with the matter. 

The operation was led by Lai Moumou and Zhang Moumou, and they reportedly conducted a variety of criminal activities using the CBDC.

Suggested read:  Supreme People’s Court of China to Impose Severe Penalties for Financial Crimes

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UN Warns of Money Laundering Risks Arising from Mekong Region Casinos

According to the U.N. Office on Drugs and Crime, the bond of China and Thailand with Myanmar is giving rise to criminal gangs in different corners of Myanmar. 

The increasing number of casinos in Laos has become a source of multiple financial crimes. From money laundering to drug trafficking, it involves several illegal activities. The United Nations warns that criminal gangs have been spread in the country, which results in an enhanced volume of narcotics across Asia. 

According to the U.N. Office on Drugs and Crime, the bond of China and Thailand with Myanmar is giving rise to criminal gangs in different corners of Myanmar. The UNODC said that casinos are a major reason for financial crimes. The criminal networks are making Southeast Asia’s Mekong River countries home and expanding their illicit activities throughout the region. 

The agency identified that Zhao Wei, the owner of Kings Romans casino, has a 10,000-hectare swath of northwest Laos. According to the regional representative of UNODC, Jeremy Douglas, “There are many SEZs and autonomous territories with security and crime problems dotted across the Mekong, but the GT SEZ is one of the most prolific and notorious, and Zhao Wei and his group are clearly very well financed and able to move money despite sanctions.”

In 2018, the U.S. Treasury Department punished Zhao and his companies. VOA could not reach Zhao, but in previous media interviews, Zhao declined all the allegations and called them baseless for no reason. VOA requested comment, but the Golden Triangle zone or a Lao government spokesperson didn’t reply. 

The UNODC estimated that much of the Golden Triangle zone’s development is because of laundered drug profits and said that Zhao’s expansion plans offer new chances to launder more. 

The Royal Thai Police Foreign Affairs Division commander Khemmarin Hassiri said that more development in casino cities on Thailand’s borders with Laos and Myanmar would provide more opportunities for several crimes. 

“If there is something to facilitate illegal activities, especially for drug trafficking, we will put that on our top agenda,” he told VOA, “they are very famous areas for drug trafficking in the past,” he said of the borderlands and their economic zones. “But at the present time, they have everything — they have drugs, they have trafficking in persons, they have … communication fraud, they have online gambling.”

Suggested Read: Increasing Financial Crimes Call to Establish a European Center of Excellence For AML Compliance

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Optus Data Breach Leaves Millions of Australians at Risk of Identity Theft

The APF is investigating Optus’s data breach that involves millions of customers’ personal data theft. The company said customers should not click on links purporting to originate from Optus.

Last week, the chief executive of Optus, Kelly Bayer Rosmarin, announced that the company’s users need to exercise ‘heightened vigilance’ for securing their identities after the criminal attacks on Optus’s security system. The motives are still unknown, but apparently, the reason is to access the personal information of millions of Australians. 

The Australian Federal Police is investigating the data breach, and about 10 million users are waiting for further advice regarding the extent of the breach, what the company is doing to help the affected ones and what they should do to ensure they don’t fall victim to identity theft.

According to Optus, the data breach involves personal information, including emails, contact numbers, driver’s listen, and date of birth. The company said, “no passwords or financial details have been compromised,” and the most serious customers have been contacted by telephone for assistance to ensure that they don’t have their identities stolen that can be used in illicit activities. 

The company also said they wouldn’t send customers any emails or SMS messages. They should not click on any link purporting to originate from Optus.

Meanwhile, the company advised the customers to change their passwords and look at their bank accounts for anomalous transactions. However, there are rumors of customers’s sold information on the dark web. 

According to AFP, it’s difficult to know whether the claims of sold data are real. There has been one attempt at extortion through an anonymous account that claims to have the data. According to that account, the data would only be returned if the company pays $1 million in cryptocurrency within one week. 

The AFP said, “It is an offense to buy stolen credentials. Those who do face a penalty of up to 10 years imprisonment”,  but that’s just a mere solace by the company for those customers facing serious threats of identity theft. 

Huge corporations like Optus require various personal data to set up a telecommunications account. Customers have to hand over their personal information. These customers trust that their data will be kept confidential and have few resources in case of cyberattacks. 

Suggested Read: FCA Advises Firms to Embed Data and Technology to Combat Financial Crimes

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Russian Financial Authorities Reach Consensus on Crypto Mining Regulation

Russian financial authorities have adopted a common ground on cryptocurrency mining regulation. The Prime Minister asks CBR, the Federal Tax Service and other departments to elaborate a mutual position on digital currency circulation.

The central bank, major government institutions of Moscow, and the finance ministry have agreed to regulate the mining of digital coins in Russia. CBR and Minfin are working on digital currency regulation for the sake of the market’s development. The industry has been expanding in Russia as a source of additional income and a profitable sector for numerous Russians. 

Parliamentary Financial Market Committee’s chairperson Anatoly Aksakov announced that draft legislation introducing regulations for the sector would be handed over to the State Duma shortly. As per RBC Crypto, the chairperson said, “In the near future, the bill will appear in the State Duma, we will work to pass it faster.”

Aksakov believes that regions with copious energy resources should be allowed for crypto mining while the ones that experience shortages should be prohibited. 

Prime Minister Mikhail Mishustin asked the central bank of Russia and other departments to elaborate a common ground on cryptocurrency circulation.

With the participation of CBR, the Russian government’s head had also ordered the Finance Ministry to submit a consensus agreement for developing the market for DFAs. 

CBR and the finance ministry will update the strategy to develop the Russian Financial Market. The prime minister said that the document’s revision is needed, and it must be done as per President Vladimir Putin’s instructions as well as the current geopolitical situation.

For a significant time period, cryptocurrency regulation has been under discussion by Russian authorities with the CBR and Minfin with opposite opinions. The Central bank proposed a complete ban. 

However, the two regulators agreed that there is a need for cross-border crypto payments in Russia to deal with the pressure that Western restrictions have exerted on foreign trade. 

Suggested Read: SARB Issues Guidance to Discourage the Termination of Crypto Transactions in Banks

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Supreme People’s Court of China to Impose Severe Penalties for Financial Crimes

China’s top courts are set to impose heavier punishments to prevent financial crimes and mitigate risks. 

Chief judge Ma Yan said that judges with financial supervision departments would work to enhance their efforts to maintain national economic security. 

According to the top court of China, the country will impose severe penalties for financial crime prevention and resolve the major financial risks. Illegal fund-raising, manipulation of the futures markets, insider trading, money laundering and similar other financial crimes are the reason behind the announcement of strict actions against fraudsters. 

On Thursday, the Chief judge of the Chiese top court, Ma Yan, told a news conference, “We will formulate, revise and improve criminal judicial interpretations for money laundering, insider trading, and leaking inside information and so on as soon as possible to ensure that criminal laws and policies are correctly implemented.”

As per statistics shown by the Supreme People’s Court, 117,100 criminal cases of financial crimes were adjudicated by the courts nationwide between 2017 and August 2022. During this period, the courts penalised 186,300 people involved in financial fraud. 

Different cases of illegal fun-rasing have been seen there. Many of them involved numerous participants who disrupted the financial management order and jeopardised the financial security of China. 

In January 2017, Xu Xiang, the general manager of Zexi Investment (a shanghai-based company), was sentenced to more than five years imprisonment over stock market manipulation. 

The cabinet issued an official document and said that China would crack down on the securities market’s illegal activities and promote the capital market’s high-quality development. 

“A few legal interpretations and guidelines, such as those regarding money laundering, loan fraud and insider trading, will also be made or amended as quickly as possible,” Ma said.

Chinese authorities have also enhanced the measures to combat financial crimes with robust security protocols. In January 2022, the top Chinese bank started a three-year action plan to fight against money laundering. 

Different departments have been called through the action plan to coordinate to address the risks of money laundering and other financial crimes.  

According to the People’s Court of China, the country has adjudicated 1,154 first-instance criminal cases in the past five years. 

Suggested Read: Increasing Financial Crimes Call to Establish a European Center of Excellence For AML Compliance

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ASIC Expands its Team to Enhance Cryptocurrency Regulations

Australia’s financial regulator has enhanced the size of its crypto team. The crypto regulatory measures include their application for financial services licenses and show that specific crypto platforms have particular liquidity in reserve.

After shifting popular blockchain from a proof-of-work (PoW) to a proof-of-stake (PoS) system, ASIC, Australia’s financial regulator, has increased the size of its crypto team. 

U.S. Security and Exchange Commission Chairman Gary Gensler stated that PoS-based tokens might be classified as securities. 

The decision of ASIC to keep PoS tokens for example Ethereum, Cardano and Solana under its remit will further clarify the situation and enable crypto regulations to be more effective. To cope with the latest regulatory reforms, the crypto exchange must either delist the tokens or start complying with robust crypto laws. 

Such moves may force a few crypto firms to manage their operating models. Even the largest stablecoin of the crypto market, Tether, has been caught in a controversy created over the failure of holding enough dollar reserves to back the stablecoin. 

The crypto regulatory measures include their application for financial services licenses and show that these platforms have particular liquidity in reserve.

The final decision by the regulator has not been issued yet. Greg Yanco, the executive director for marketers, said that ASIC won’t be a “cheerleader for crypto assets.”

SEC Newgate carried out research the last November. It showed that 44% of Australian retail investors reported holding crypto. Out of these investors, only 20% viewed crypto as high-risk. 

The chairperson of ASIC responded and said that the regulators were “concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulating crypto-assets to better protect investors.”

According to Yanco, until the last year, cryptocurrency was not such a high priority. Still, due to the decline of cryptocurrency in the previous few years and investors wiped out around the globe, ASIC expanded its team. It made crypto one of its “core strategic projects.”

Suggested Read: Regulatory Authorities to File a New Bill to Secure the Citizens from Cyber Criminal Activities

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Latvian State Police Bust a Major Money Laundering Ring

Latvian State Police has identified and busted a huge criminal gang involved in money laundering. Investigations have revealed the involvement of youngsters including a German citizen. 

In February, the Latvian State Police Department of Cyber Crimes commenced a criminal proceeding when a Latvia-based credit institution noticed the activities of systematic fraud on their clients’ accounts and passed on this information to the Latvian State Police Department.

Investigations revealed that the money mules network was working in Riga comprised youngsters between 16 to 20 years old.  These individuals received flash payments on their accounts, and most of the payments came from German citizens. After that, the money from those accounts was quickly withdrawn in cash. It happened around midnight in most of the cases.  

Victims usually tried to call the midnight transactions the next day. However, the masterminds of the criminal group ensured an immediate money withdrawal, due to which only a few victims could intercept and recover the stolen money by the criminal gang.   

Latvian police investigated the case and endeavoured to stop this criminal group. They identified the suspect and succeeded after trying for months to sort out the matter. 

As per the police investigation, 14 members were involved in the criminal group. One of those was a German citizen who coordinated with the group from Germany. The criminal gang used these people to move and receive illegal money. After the withdrawal, the money was given away in virtual currency form.

After getting the money, the group members distributed the acquired cash among themselves. The money mules got payments from 50 to 250 Euros, depending upon their services. EUR 555 600 in financial crimes was managed to be laundered by the criminal gang. Police detained 13 group members, including the group leader, in April 2020. 

The German group leader was arrested in May 2022 through a European arrest warrant. The arrest warrant resulted from cooperation between several countries, law enforcement, and special investigations to combat criminal activities. In the summer of 2022, Germany handed over the group leader to Latvia for criminal prosecution.

The Latvian police department then handed criminal proceedings to Specialized Prosecution Office. State Police stresses to society that such illegal activities through a huge number of willing youngsters to assist criminal gangs is a point to ponder.

The accused ones who worked as money mules will not only face criminal liabilities but also face difficulties later on because banks close down the access of such people to their accounts and internet banking services. 

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