The past week was busy for AML practitioners, law enforcement, and financial investigators all over the world, as a Singapore-based cryptocurrency exchange reimbursed customers impacted by an Ethereum heist in January; a transnational Interpol operation smashed a wildlife trafficking gang active bewteen Africa and Asia; and the UK's National Crime Authority seized millions from an Azerbaijan-based money laundering scheme linked to a prominent political figure.
Find out more on these stories below.
Crypto.com’s multimillion-dollar hack sparks money laundering fears for investors
Concerns have been raised about heightened money laundering risks for crypto trading following the fallout from the hacking of Crypto.com, a cryptocurrency exchange headquartered in Singapore. On January 17th 2022, the company stated that the hack had compromised 483 accounts, netting $15m (£11.2m) worth of Ethereum and smaller amounts of Bitcoin and other cryptocurrencies.
Although Crypto.com reimbursed affected investors and restored their services within days, independent commentators believed the breach to be worth as much as $33m (£24.65m). Suspicions voiced included that the hackers used Tornado Cash, a service protocol which offers crypto mixing to users - a function that conflates numerous finance sources into one larger resource, then randomly and irregularly redistributes the funds to multiple destinations, making the origins difficult to trace.
Tornado Cash also uses decentralized finance (DeFi) tech, which enables investors to trade directly with one another independently of, and possibly undetected by, banks or other monitoring entities. The potential for money laundering with such anonymity presented by DeFi and crypto mixing was highlighted by commentators, with regulation of the growing cryptocurrency industry already presenting a challenge for AML teams, regulators, and law enforcement the world over.
Read more on this story at Yahoo Finance UK.
Transnational Interpol operation shuts illegal wildlife trafficking routes and disrupts associated financial crime
An Interpol operation spanning Africa and Asia has successfully broken up an illegal wildlife trafficking enterprise which was smuggling prohibited animals and animal parts between the two continents.
Codenamed ‘Golden Strike,’ the two-month tactical phase of the operation was preceded by intelligence gathering from 23 member countries and took place during August and September of 2021 through roadblock inspections and law enforcement investigations at road borders, ports, and airports.
Interpol announced the results of Golden Strike in late January 2022, some highlights of which were:
• The successful co-operation of 23 Interpol member states, including 13 from Africa and 10 from Asia
• About 100 suspects were identified overall, and arrests are ongoing
• Over four tonnes of ivory and 72kg (159lb) of Rhino horns were seized
• 1336 species protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) were recovered
Commenting on the operation, Interpol’s Ilana de Wild said that the illegal wildlife trade “goes hand in hand with tax evasion, corruption, money laundering and even murder, with organized crime groups using the same routes to smuggle protected wildlife as they do people, weapons, drugs and other illegal products.” Wildlife trafficking is currently regarded as one of the top three predicate crimes for money laundering.
Read more on this story at IOL.
UK investigators seize £5.6m in laundered money from accounts linked to Azerbaijani politician
A Westminster Magistrates Court District Judge has ruled that £5,630,994.19 currently frozen in UK bank accounts linked to prominent Azerbaijani politician Javanshir Feziyev and his family be forfeited. The judgement is the result of an investigation by agents of the UK’s National Crime Agency (NCA), who suspected that funds in the accounts of Feziyev, a member of the Azerbaijani parliament and sitting chair of the UK-Azerbaijan All Parliamentary Co-operation Committee, and members of his family, had been laundered.
The NCA investigators charged that the Feyziyev family’s accounts were funded by money of illicit origins which had been laundered via a series of shell companies - a well-worn money laundering technique. They further proved that the illicit financial flows were linked to the so-called Azerbaijani Laundromat, an intricate and well-established money laundering scheme that was first exposed in September 2017.
Commenting on the case, NCA Head of Civil Recovery Andy Lewis said that “This is a substantial forfeiture of money laundered through the Azerbaijan laundromat, and our success highlights the risk to anyone who uses these schemes.” A spokesperson for the Feyziyevs, however, noted that of the £15.3m initially frozen because of the NCA investigation, the Judge ordered that “approximately £10m” be released back to the family.
Read more on this story at City AM.
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