10 Nov 2023
Welcome to this week’s AML Roundup. In our anti-money laundering news this week, the FCA is demanding banks do more to stop authorised push payment fraud and that they treat victims better. There’s an interesting article on how to submit a high-quality Suspicious Activity Report (SAR) and in Canada, the British Columbia Securities Commission is planning to pay whistle-blowers for information on investment fraud and other financial misdemeanours.
The EU Parliament has reached agreement on a new digital identity wallet for EU citizens. In gambling news, the regulator in Malta has introduced a landmark ESG code of practice.
Crypto news this week covers the fallout from the conviction of Sam Bankman-Fried for fraud and money laundering in New York. It also covers the news that UK regulators the FCA and Bank of England have published stablecoin regulation proposals for introduction in 2024.
To complete this week’s Roundup, we provide you with further money laundering, fraud, corruption and bribery updates from around the world. In addition, there is news on new sanctions against Oil and Gold entities funding Russia’s continuing war effort against Ukraine.
Money Laundering, Fraud & Corruption
FCA: Firms need to strengthen anti-fraud systems and treat victims better
The Financial Conduct Authority (FCA) is demanding banks and other firms strengthen their anti-fraud systems. In the first half of 2023 over 116,000 people reported falling victim to authorised push payment (APP) fraud. The FCA is demanding firms do more to prevent this and improve support for victims.
How to submit a high-quality SAR
With the UK’s National Crime Agency (NCA) expected to receive more than a million Suspicious Activity Reports (SARs) next year, this article discusses how to craft a good SAR with the focus on suspicion and surety.
British Columbia Securities Commission offers cash payments to whistleblowers
The BC securities Commission is following the lead of the US and other Canadian states by offering cash payments to people prepared to blow the whistle on investment fraud and other market misconduct. Payments could range from $1000 to $250,000.
Luncheon & Lecture in House of Commons: Nuts & Bolts of the Transnational US AML Law
Earlier this year, RiskScreen held a webinar with Stephen Kohn, world-renowned expert on whistleblower law and international anti-corruption. On Thursday 30th of November at 1:30pm, Stephen will be presenting a lecture at the House of Commons on the United States’ new transnational AML law, which he helped draft. Interested participants may register to attend and find more information here. All registrations will be vetted prior to the extension of an official invitation. Register ASAP, as capacity is limited, and invitations will be extended on a first come first serve basis. Lunch will be provided.
Legislation, Regulation and Sustainability
European Parliament reaches agreement on EU wide digital identity and wallet
The EU Parliament and EU Council have reached agreement on the creation of a new Digital Identity Wallet for EU citizens to identify and authenticate themselves online without having to resort to a commercial provider. It will include “qualified electronic signatures” for EU wallet users, which have the same legal standing as a handwritten signature. It will be available on a voluntary basis and users will have the right to use a pseudonym.
FinCEN finalises rule on use of FinCEN identifiers for reporting on Beneficial Ownership
The US Financial Crimes Enforcement Network (FinCEN) is issuing a final rule that specifies the circumstances in which a reporting company may report an entity’s FinCEN identifier in lieu of information about an individual beneficial owner.
Gaming and Gambling
MGA publishes landmark ESG code of practice
The Malta Gaming Authority (MGA) has introduced its Environmental, Social and Governance (ESG) Code of Good Practice for the remote gaming sector. The Minister for the Economy, Silvio Schembri, said: “All businesses should embrace tools to reduce risk and transform successfully, and when it comes to remote gaming, one of the tools is using ESG metrics. The ESG code will serve as an instrument for self-regulation, helping remote gaming companies align with best practices and maintain a position that allows them to effectively meet the evolving expectations of key stakeholders in the sector.”
Crypto & Virtual Assets
FCA and Bank of England publish stablecoin regulation proposals
The Financial Conduct Authority (FCA) and the Bank of England have published proposals for a comprehensive framework for stablecoin regulation. Stablecoins are digital assets who value is pegged to traditional currencies offering a secure store of value. Because of this, they reduce the volatility inherent in cryptocurrencies and have found adoption for a range of financial transactions including cross-border payments.
One of the key components of the framework centres on AML and KYC including requirements to be imposed on stablecoin providers to prevent illicit activities and fraud. Both the FCA and Bank of England have published discussion papers.
EBA issues liquidity guidelines for stablecoin issuers
The European Banking Authority (EBA) has issued guidelines regarding liquidity stress testing for stablecoin issuers in line with the EU’s new Markets in Crypto Assets (MiCAR) regulation. The consultation period for the new proposals runs until 8 February 2024.
Sam Bankman-Fried, ex-CEO of cryptocurrency exchange FTX, found guilty of fraud and money laundering
In a case that continues to cause shockwaves throughout the crypto industry, Sam Bankman-Fried has been found guilty of fraud and money laundering in New York. $8bn of funds went missing when FTX went bankrupt last November. Bankman-Fried now faces decades in jail.
SEC Chair Gary Gensler warns of “multiple fraudsters” in the crypto sector in the wake of the Bankman-Fried trial
US Securities and Exchange Commission (SEC) Chair Gary Gensler warned of multiple fraudsters involved with cryptocurrency and reiterated that the sector faces widespread fraud during a speech during DC Fintech Week. He said: “It’s not just about one circumstance and one notorious fraudster, it’s multiple notorious fraudsters”.
UK imposes further sanctions on gold and oil networks financing Russia’s war effort against Ukraine
The UK this week has sanctioned 29 individuals and entities across Russia’s gold and oil sectors to stop money and material keeping Russia’s war against Ukraine going.
RiskScreen AML spotlight report
AML Vulnerabilities in Gaming and Gambling
Gaming and gambling companies risk getting caught in a pincer movement. On the one hand, criminal groups are eyeing the potential opportunities afforded by the industry to launder the proceeds of wrongdoing, particularly as online gambling has boomed. On the other, regulators, alert to this danger, are increasingly cracking down on companies judged to have fallen short on anti-money laundering (AML) standards.
In this industry report, we look at:
– Where gambling and gaming companies face AML risks
– The regulatory environment
– How to ensure compliance with AML
Download this valuable compliance analysis here.
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