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Banks work together whilst criminals exploit popular apps

Banks appeal for laws to share information amongst themselves, criminals launder relief money and FinCEN looks to monitor more crypto transactions.

Antonis Melis
November 20, 2020

Four top banks in Belgium have asked for new laws that would allow them to communicate information about suspected money laundering between themselves, through a secure system.

Criminals exploit their victims through popular apps, making them “money mules” that unknowingly help to launder coronavirus relief money.

And FinCEN looks to adjust its threshold on international payments as criminals are laundering money through small transactions.

Find out more on these stories below.

Belgium’s biggest banks propose system to share suspected money laundering information

Together four Belgian banks, ING Belgium, KBC Bank, Belfius Bank and Insurance and BNP Paribas Fortis, have jointly asked for laws which would allow them to set up a secure system to share information about suspected money laundering activities and the shady entities behind them.

“We are urgently asking to engage as a real partner in the fight against money laundering, and not just as a reporter of suspicious transactions to the anti-money laundering unit, as is the case now,” Marc Raisière, chief executive of Brussels-based Belfius, testified, according to De Tijd.

Could the actions of these four banks create change in the banking industry as a whole?

Criminals launder coronavirus relief money and exploit victims through popular apps

Law enforcement officials have said that criminals are laundering illegally obtained funds meant for Covid-19 relief through the most popular apps, such as Cash App, Venmo, Zelle and PayPal.

Roy Dotson, an assistant to the special agent in charge of the Secret Service, told CNBC “I’ve never seen, in my 28 years’ experience, the amount of fraud that I’ve seen currently.”

Dotson said fraudsters find “money mules” to deposit funds into the apps, then move them from one account to the other to hide the source of the funds. He described the volume of fraud as “inevitable” based on the size of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was set up to provide fast and direct economic assistance for American citizens during the ongoing pandemic.

Read more about what money mulling is, and how to identify patterns related to this form of laundering – Identifying money mules is difficult by design

FinCEN wants details on all cross-border transactions over $250

U.S. regulators are discussing a new proposal that will modify the thresholds at which banks collect and store fund transfer information, reducing it from $3,000 to $250 for any transfers, in crypto or fiat payments, that go outside the U.S.

Speaking at the V20 Virtual Asset Service Providers Summit, Carole House, cyber and emerging tech policy specialist at FinCEN, said that “criminals are using smaller value transfers and virtual currencies to facilitate terrorism financing, narcotics trafficking and other illicit activities, like cybercrime,” which is why FinCEN has proposed lowering the “Travel Rule” threshold.

The Travel Rule aims to prevent money laundering by identifying the originator and beneficiary of a transaction when funds of over a certain amount are transferred.

What would a law like this mean for banks and payments services?

Find out how we can help identify suspicious activity

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