FIAU Fines Crypto Firm €460,000 for Anti-Money Laundering Violations

FIAU (Financial Intelligence Analysis Unit) charged a crypto exchange and broker with a €463,235 ($497,305) fine over anti-money laundering and counter-financial terrorism failings.

Bequant, the crypto firm that describes itself as “a one-stop solution for professional digital-assets investors and institutions”, was found guilty of breaching the regulations in two distinct inquiries into different arms of their operations carried out in 2021.

FIAU noted that the business risk assessment drafted by the exchange was drafted late and the approval is still pending by the company’s BODs (Board of Directors) by the time of evaluation. 

The authority also noted that the company needed to gather information on addresses from which the customers were sending or receiving financial assets. Many other violations were also part of the report, including shortcomings to justify customer risk ratings and adverse media screenings that were frequently carried out after the business relationship had begun.

Bequant Exchange Limited was charged €220,992 for these violations.

In a separate assessment, Bequant Pro Limited was also found to have administrative failures, including an inaccurate business risk assessment methodology and insufficient customer risk assessment procedures. €242,243 was charged for these shortcomings. 

FIAU highlighted the inadequate procedure of the company’s risk assessment, consisting of a single Word document which determines customer’s risk ratings “without any explanation or rationale as to how this risk rating was assigned.” It also found various failures in the company’s transaction scrutiny, pinpointing one withdrawal of €887,280 as an example of a lack of transaction scrutinisation. 

The firm was also found to fail the EDD (Enhanced Due Diligence) process in cases where the customers are in a jurisdiction under increased FATF monitoring and processing  “a large amount of transactions within a very short period of time”, with one particular customer even processing “hundreds of transactions (…) every single day.”

The FIAU highlighted one instance where the company used only a single screenshot as the supporting document for a crypto transaction of over €1m, despite the one who made the transaction being a high-risk customer. 

Bequant Exchange Limited voluntarily surrendered its MFSA (Malta Financial Services Authority) licence in September 2022 and is no longer registered with the MFSA. Meanwhile, Bequant Pro still holds the licence with authority. 

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