The Week Of: April 6, 2020

This week’s news and stories of interest to the AML community. If you prefer a news roundup sent to you, subscribe to our weekly newsletter.

Trade-based money laundering, crypto, and North Korea

We’ve noted before how some countries use cryptocurrencies to evade U.S.-imposed sanctions and that North Korea in particular uses hacking to steal from vulnerable crypto exchanges.

Now, Coindesk goes into more detail of how North Korea may be using their stolen crypto to fund a web of illicit trade networks and supply chains, though concrete evidence has not been found yet.

According to blockchain analytics firm Chainalysis, “it’s logical to assume North Korea’s ill-gotten crypto is being moved in trade-based money-laundering networks.” One example is moving cargo, such as coal, from one ship to another in the open sea rather than at port. North Korea could be paying shipping companies and brokers with crypto to those willing to accept it.

“There are all these middlemen that North Korea absolutely needs in order to be able to export goods like seafood or to be able to place workers overseas,” said Kayla Izenman, research analyst at [the Royal United Services Institute]. “You have to pay these people somehow and a logical way would be to use crypto.”

Using crypto also avoids relying on Chinese banks, who are facing more pressure from the U.S., to facilitate payments, or carry bulk cash.

Read more at Coindesk.

CFTC Issues COVID-19 customer advisory on fee scams

As the coronavirus pandemic continues to grip the nation and record numbers of Americans file for unemployment each week, the U.S. Commodity Futures Trading Commission issued a public advisory for consumers to be on the alert for scammers seeking to profit from job losses.

“One of the best defenses against becoming a victim of fraud is being informed,” said CFTC Chief Communications Officer and Director of Public Affairs Michael Short in a statement released on Monday.

The CFTC specifically pointed to frauds that contact victims through social media and messaging apps seeking to convince them that they can earn high profits from home, but later force them to pay “fees” or “taxes” to get their supposed earnings. The frauds involved are typically unregistered brokers selling binary options, foreign exchange (forex) programs, and cryptocurrencies.

Read more from the CFTC here.

Alberta government introduces human trafficking bill

The Alberta government this week introduced a new bill to help combat human trafficking and empower survivors.

If passed, the Protecting Survivors of Human Trafficking Act will:

  • expand the definition of sexual exploitation to include people of all ages
  • make it easier for survivors to get protection orders
  • enable police to take faster action to rescue survivors
  • allow survivors to sue traffickers
  • create an awareness day on Feb. 22

Read more about the bill at Global News.