The Week Of: June 8, 2020
This week’s news and stories of interest to the AML community. If you prefer a news roundup plus other AML/KYC content sent to you, subscribe to our weekly newsletter.
Canada officially classifies crypto companies as money service businesses; Bitcoin ATMs face tighter regulations
Effective June 1, Canada officially recognized companies dealing in cryptocurrencies as legitimate money services businesses (MSBs) as part of the country’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
Crypto firms now need to register with the National Financial Transaction Reporting Centre (FINTRAC) and comply with relevant regulations, including reporting transactions more than 10,000 Canadian dollars.
Francis Pouliot, the CEO of a Canadian crypto asset exchange, noted that the new regulations will predominantly affect cash-based businesses like Bitcoin ATMs.
A recent report from crypto and blockchain forensic firm CipherTrace found that 88% of funds sent via US-based Bitcoin ATMs were sent offshore and the percentage of funds sent to high-risk exchanges from US BATMS has seen exponential growth.
EUROPOL launches European Financial and Economic Crime Centre
The European Union’s top law enforcement agency, Europol, last week launched a special unit to provide operational support to EU member states as financial crimes rise in the wake of the COVID-19 pandemic.
“Economic stimuli such as those proposed in the wake of the COVID-19 pandemic will be targeted by criminals seeking to defraud public funding,” said EUROPOL in a statement. “The exponential increase of financial and economic crime and the involvement of organised crime on a large scale, together with the number of requests for operational support from EU Member States, called for an adequate and coordinated European response.”
The new unit will be staffed with 65 international experts and analysts.
In addition, the agency released a report providing an overview of the “most threatening phenomena in the area of economic and financial crime including various types of fraud, the production and distribution of counterfeit goods, money laundering and others.”
Secret Service warns of potential $30B in coronavirus fraud
U.S. Secret Service Assistant Director Michael D’Ambrosio told a Senate Judiciary Committee this week that the agency had prevented $1 billion in coronavirus-related fraud losses.
However, he warned that even if just one percent of the $3 trillion in government programs that Congress has appropriated during the pandemic is lost to fraud, more than $30 billion in taxpayer money would end up in the hands of criminals.
D’Ambrosio described an evolution of criminal activity since the beginning of the pandemic—the Secret Service’s first alert was released in March—from email phishing campaigns to the sale of fraudulent medical equipment, cybercrime, ransomware attacks, and the defrauding of government and financial institutions.
“Longer-term, we will work to ensure that those who have criminally exploited this crisis are arrested and successfully prosecuted,” he said.