Doing the bare minimum is no longer acceptable when it comes to AML/CTF compliance. The global regulatory environment is evolving around governments implementing stricter AML laws, international regulators increasing enforcement actions and new innovative technology that open up opportunities for businesses, consumers and criminals. Let’s have a look at what has been happening over this week.
Global regulatory changes:
EU proposed ban on anonymous digital currency transfer
Dated: 23.07.21
European Union has one of the strictest AML/KYC regimes globally, and now they are tracking down virtual assets with their regulatory reforms. The European officials proposed that all companies transferring “crypto-assets” must collect details of the senders and recipients in an effort to crack down on crimes like money laundering, the transfer of illegal gains, and tax evasion. It will apply to the existing travel rule to digital currency transactions for the member countries. The companies involved in the transfer of crypto assets must collect the following information: name, address, date of birth, account number, and name of the recipient. The EU’s crackdown is only the opening volley globally to tame and regulate the virtual currency space.
China imposes counter-sanctions on the U.S.
Dated: 24.07.21
According to reports, China has imposed counter-sanctions on U.S. individuals, including former U.S. commerce secretary Wilbur Ross in response to recent U.S. sanctions on Chinese officials in Hong Kong. In June, China first imposed its new anti-foreign sanction law. They also set unspecified “reciprocal counter-sanctions” on current and former representatives of various organisations, including the Congressional-Executive Commission on China and the U.S.-China Economic and Security Review Commission. Will this lead to a war of sanctions on a global scale?
A new draft passed by Israel’s officials requiring Investors to report crypto holdings
Dated: 29.07.21
Israel’s Ministry of Finance issued a draft law making it mandatory for investors to report crypto holdings exceeding $61,000 to tax authorities. According to a section in Israel’s proposed bill dedicated to the “increased supervision” of virtual currencies, the reporting requirement is intended to optimize tax collection from their use. If the bill is approved, investors who purchase virtual currencies directly or through someone older than 18 will have to report all holdings worth $61,000 or more if the assets were held for at least one day. But the bill is facing opposition from the Israeli Bitcoin Association (IBA) and other crypto advocates. Will the bill pass and help the Israeli Tax Authority (ITA) reduce Israel’s volume of “black capital” and expose unreported assets and income?
Fraud and corruption news:
Taiwan’s watchdog fined Taishin International Bank USD 1.07 million for embezzlement
Dated: 26.07.21
Robinhood Markets Inc.’s cryptocurrency arm expects to pay a $30 million fine to settle a New York state probe into its cybersecurity and anti-money-laundering practices. Other violations include cybersecurity and virtual currency requirements; an official added, “including certain deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security.” The penalty would be on top of a $70 million fine from the Financial Industry Regulatory Authority (FINRA) and a $65 million settlement with the Securities and Exchange Commission (SEC).
Bank of China fined $1.25 million for the failure of banking regime and money laundering regulations
Dated: 27.07.21
Regulator’s report, the Superintendency of Banks of Panama (SBP), sanctioned the Bank of China with 1.25 million dollars for breaches and violations of the banking regime and the prevention of money laundering. $1,000,000 sanctioned for violations of the banking regime and $ 250,000 for non-compliance with the money laundering prevention regime.
$33 million seized in digital currency money laundering by the Brazilian Police
Dated: 28.07.21
Brazilian authorities have seized over $33 million in a digital currency money-laundering investigation involving more than a dozen fictitious companies. According to the Police, the seizure was the successful conclusion to Operation Exchange, covering six warrants in Diadema, Sao Paulo. One of the exchanges has a history of dealing almost exclusively with the bogus companies, the Police alleged. In a five-month period, the exchange-traded $1.93 million in digital currencies with at least six fictitious companies. Its books also show that eight other companies acquired $2.9 million in digital currencies at the time. Brazil has seen multiple criminal activities using digital currency. Is it time for officials to take regulatory measures for virtual assets to control these frauds?
KYC tech and trends:
The Crypto industry is moving towards becoming the “Safest Environments Ever.”
Dated: 29.07.21
In recent years, the crypto industry has seen law enforcement and regulators actively working with blockchain technology and using its traceability benefits to crack down on crime. Blockchain analytics firm Chainalysis issued a report revealing findings that just 0.34 percent (USD 10 billion) of all cryptocurrency transactions in 2020 represented illicit activity, down from roughly 2.1 percent (USD 21.4 billion) a year earlier. There is fragmented growth in crypto regulations, with few countries adopting strict regulations while others oppose these regulations. FATF, in its second 12-month review of the implementation of its revised Standards on virtual assets and VASPs (virtual asset service providers) that the industry is not moving quickly enough, and countries are not implementing regulations fast enough. But these reforms from global regulators is a slow and steady effort in moulding the crypto industry as the safest environment in the near future.
This week at Data Zoo:
Learn how to verify your Italian Citizens
Dated: 29.07.21
Italy’s high average income and consumer spending make it one of Western Europe’s most attractive markets for multi-national companies. With the improving COVID situations and an upward revision to the first-quarter GDP data, the Bank of Italy forecasted a growth of 5% for this year and 4.5% for the following year’s economy. Italian regulators are taking strict measures to ensure compliance with global regulators to mitigate the corruption from the system. Get to know more about the economy, regulators, and regulations of Italy.
Author Sara Singh Tak, Data Zoo Marketing Specialist
About Data Zoo:
Data Zoo is setting the new standard for identity verification. With over a decade of experience, we have helped top global organisations reduce risk and verify their customers. Our innovative global solutions utilise independent; government, credit, utility, and commercial data sources to provide clients with industry-leading match rates and unparalleled response times.
