Top stories this week:
Germany Shuts Down 47 Cryptocurrency Exchanges Due to Lack of AML Controls | New Report Calls for AML Supervisory Feform for UK legal and Accountancy Bodies
Welcome to this week's edition of the KYC Roundup, your gateway to the most impactful developments in the world of Anti-Money Laundering and financial crime. In the AML arena, Germany shut down 47 cryptocurrency exchanges for a lack of AML controls. While a new report called for AML supervisory reform for UK legal and accountancy bodies and the U.S published beneficial ownership reporting requirements for small businesses.
In the fast-paced world of sanctions, the G7 issued guidance on preventing sanctions evasion and the U.S imposed sanctions against entities involved in facilitating illicit payments between Russia and North Korea.
In the corruption space, the former Singapore Transport Minister was found guilty of corruption and the Council of Europe published a report on anti-corruption progress in Ireland.
We round off this week’s roundup with a chance to view our Ultimate Beneficial Ownership (UBO) guide, which highlights why UBO identification is crucial for compliance and how the process can be streamlined.
KYC & AML
Germany shuts down 47 cryptocurrency exchanges due to lack of AML controls
Germany's Federal Criminal Police Office (BKA) shut down 47 cryptocurrency exchanges due to insufficient AML controls. The exchanges were used by ransomware gangs for illicit financial operations and German authorities seized the platforms' servers and froze assets
U.S. publishes beneficial ownership reporting requirements for small businesses
The U.S. has published a guide outlining new beneficial ownership reporting rules for small businesses. Effective in 2024, the rules require companies to disclose their owners to FinCEN. This effort is part of the Corporate Transparency Act, which seeks to curb the misuse of anonymous shell companies by criminals and corrupt actors.
New report calls for AML supervisory reform for UK legal and accountancy bodies
A new report from the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) highlights the urgent need for reform in AML oversight within the UK legal and accountancy sectors. The report criticises the current framework, which involves self-regulation, as being too lenient and insufficient to curb the growing threat of dirty money flowing through professional services. There are calls for a central regulator to replace existing bodies to improve compliance and prevent criminal exploitation of these industries.
Major banks unwittingly processed payments for companies linked to Prigozhin
Several major banks, including JPMorgan and HSBC, reportedly processed payments for companies linked to Russian oligarch Yevgeny Prigozhin, head of the Wagner Group. The transactions, connected to businesses involved in Wagner's African operations, were allegedly processed without the banks' knowledge of their ultimate beneficiaries. This incident highlights the vulnerabilities in global banking systems.
HSBC urges tech firms to help refund fraud victims
HSBC has called on tech companies to assist in refunding victims of rising APP fraud. Noel Quinn, HSBC CEO, urged technology platforms to take responsibility, stating: "It cannot be right that banks alone shoulder the burden." The bank argues that tech firms, especially social media platforms and app stores, should share responsibility for identifying and preventing scams.
AML group suspends Colombia access
The Egmont Group, a global anti-money laundering body, has suspended Colombia's financial intelligence unit (FIU) from accessing its information-sharing network. The suspension stems from an unauthorised disclosure of information.
TD Bank CEO Bharat Masrani announces retirement
TD Bank CEO Bharat Masrani has announced his retirement, effective early 2025. Masrani will be succeeded by Raymond Chun, the current Group Head of Wealth Management. Under Masrani's leadership, TD expanded significantly, particularly in the U.S. market. However, the bank has been subject to a significant AML investigation which may have prompted the change in leadership.
FATF warns India over lack of AML convictions
The Financial Action Task Force (FATF) has raised concerns over India's low conviction rates for money laundering cases, despite significant progress in legislation and enforcement. Vivek Aggarwal, Additional Secretary at the Department of Revenue in the Ministry of Finance, confirmed plans to notify special courts and appoint additional prosecutors to speed up cases, signalling India's commitment to addressing FATF’s recommendations.
Caroline Ellison sentenced to two years in prison for her role in FTX scandal
Caroline Ellison, former CEO of Alameda Research, was sentenced to two years in prison for her role in stealing billions from customers of the cryptocurrency exchange FTX fraud. Ellison cooperated with prosecutors, providing crucial evidence against ex-boyfriend, FTX founder Sam Bankman-Fried.
Sanctions
G7 issues joint guidance on preventing sanctions evasion
The G7 has issued new joint guidance to help industries prevent sanctions evasion, particularly regarding export controls linked to Russia. The guidance outlines best practices for companies to identify and mitigate risks of sanctions evasion in their supply chains, including enhanced due diligence and information-sharing protocols
U.S. imposes sanctions against entities involved in facilitating illicit payments between Russia and North Korea
The U.S. Treasury imposed new sanctions targeting five entities and one individual facilitating illicit financial transactions between Russia and North Korea. The schemes helped North Korea access the international banking system in violation of UN sanctions.
Corruption
Former Singapore Transport Minister found guilty of corruption
Singapore's former Transport Minister, Subramaniam Iswaran, has been found guilty of corruption following an investigation into his illicit dealings with private sector executives. Iswaran admitted to receiving bribes in exchange for business favours, a rare but high-profile case in a country known for its strict anti-corruption policies.
Council of Europe publishes report on anti-corruption progress in Ireland
The Council of Europe’s anti-corruption body, GRECO, has published a report evaluating Ireland’s progress in fighting corruption. While the report acknowledges some improvements, it criticizes Ireland for its slow implementation of key reforms, particularly in ensuring transparency within the political system. GRECO calls for stronger legislative measures and oversight mechanisms to close loopholes and align with European anti-corruption standards. Ireland’s government has pledged to address the recommendations in the coming months.
KYC360 News
A Guide to UBO - Ultimate Beneficial Ownership
Complex corporate structures often obscure the true owners of a business. Understanding Ultimate Beneficial Ownership (UBO) is essential for AML compliance and due diligence efforts. Learn the best practices for identifying UBO and see how the process can be streamlined.
Your latest weekly update from the worlds of money laundering, legislation and regulation, sustainability, gaming and gambling, crypto and sanctions.
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