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According to the ADGM investigations, the fintech industry violated the AML obligations by not upholding the measures for risk assessment and due diligence on its customers. The authority found that the financial institute, from March 2021 to November 2022, failed to notice that their requirements and measures to comply with AML did not uphold the standards. The regulatory authority added in the statement that Pyypl Bank could have more effectively monitored and reported suspicious transactions.
The Authority stated that the financial company failed to carry out safety measures on its customers, including money laundering, risk assessments, customer due diligence, not reporting exceeding volumes of transactions, and suspicious transactions. The Abu Dhabi Financial Services Regulatory Authority (FSRA) claimed the inadequate money laundering prevention systems and controls of the Pyypl did not cause any case. However, regulatory authorities found that Pyypl, along with a third party, provided security to its customers to buy contracts of insurance through an application provided by Pyypl. The FSRA stated, “In doing so, Pyypl was found to have conducted the regulated activity of insurance intermediation without the appropriate authorisation to perform this activity.”
Pyypl did not challenge the FSRA findings and was ready to settle the fines promptly. After this, they qualified for the 20% discount on the penalty; otherwise, the total amount would have been $607,500. The regulatory authority stated, “Pyypl and its senior management cooperate fully with the FSRA’s inquiries, and Pyypl has remediated each of the issues identified by the FSRA, subject to the FSRA’s verification.”
The UAE is the second-largest growing economy in the world, and to protect the integrity of the financial ecosystem, they issued rigorous AML regulations and showed significant progress in combating money laundering and terrorist financing over the years. Chief executive of FSRA, Emmanuel Givanakis, asserted, “The FSRA is committed to taking proactive steps to ensure that all regulated entities maintain high standards to combat financial crime and money laundering risks and that regulated entities comply with the FSRA’s rules and regulations. The FSRA will not hesitate to take robust action to ensure that firms comply fully with anti-money laundering requirements in ADGM and that authorised firms do not conduct regulated activities outside the scope of their licence.”
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