China moves against crypto trading to beat financial crime, it’s a slow start for the US Treasury’s new anti-money laundering whistle-blower program, and money laundering in Western Balkans cities drives up property prices
Find out more on these stories below.
China hammers crypto-trading in drive against financial crime
Three powerful state-backed financial agencies have banned their member organisations from dealing with cryptocurrency in any way. The ban includes provision of cryptocurrency services of any kind and accepting cryptocurrency as payment.
The National Internet Finance Association of China (NIFA), China Banking Association (CBA), and China Payment and Clearing Association (PCAC), who collectively represent internet firms throughout the financial sector, described cryptocurrency speculation as having “seriously infringed on the safety of the people’s property and disrupted the normal economic and financial order.”
China is currently the largest Bitcoin mining country in the world. Various crypto scams have evolved, which authorities are cracking down on. A cryptocurrency pyramid scheme in Anhui province was thwarted by police in January which involved some 2000 people and was worth 元200 million (£21,9 million).
Meanwhile, the Inner Mongolia Development and Reform Commission announced the establishment of a whistle-blower platform which will encourage residents to report illegal Bitcoin mining operations anonymously.
The agency further explained that illicit Bitcoin mining enterprises hide their true intentions to exploit policies governing business tax, property rentals and electricity charges. The market’s response to the new regulations was immediate, with a four-month low slide for the cryptocurrency.
Read more on this story at Regulation Asia.
Absence of minimum reward stymies US anti-money laundering plan
The US Treasury’s cash-for-tips program was passed by the US Congress in January’s annual defence-spending bill.
The program aims to incentivize potential whistle-blowers to report possible violations of anti-money laundering (AML) laws. If their tips lead to successful enforcement actions where fines over $1 million (£709 000) are issued, whistle-blowers stand to receive up to 30% of the monetary penalty imposed.
However, lawyers representing whistle-blowers expressed scepticism, as no minimum reward is offered, as is the case in similar programs run by Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Stuart Meisner of Meisner Associates, a firm representing whistle-blowers, says the absence of a minimum reward and lack of clarity on both how the financial sanctions are calculated, and what the lines of reporting for tipsters are, make taking on clients within the Treasury’s jurisdiction unappealing.
Mr Meisner explains that investigations can take years, adding that it is “too frustrating, knowing that you might not get an award when you help with the investigations.”
The Treasury’s Financial Crimes Enforcement Network (FinCEN), which runs the program, is to consult with other government agencies, including the CFTC and SEC, which have effective whistle-blower programs in place.
Read more on this story at the Wall Street Journal.
Western Balkans cities are vulnerable to money laundering
Throughout the Western Balkans, urban real estate and construction sectors are being used by financial criminals to launder money elicited from the trafficking of drugs and migrants, which has caused a spike in the price of property in the region’s cities. This came to light in a report released by the Global Initiative Against Transnational Organised Crime earlier this month.
While there is nothing new or restricted to the region about both the real estate and construction industries being used as vehicles for money-laundering, the report recorded that although “real estate prices dropped across the region in 2020 due to COVID-19 …many places still showed gains since 2017.”
The report cited Albania as seeing its real estate industry expand by 5.5% per cent during the coronavirus pandemic while nationally the economy suffered. Serbia’s real estate sector was comparably incongruent with that country’s overall economic performance during the pandemic. Montenegro and Kosovo recorded similar anomalies.
Elsewhere in the report, the Global Initiative noted that several of the region’s countries have lax beneficial ownership declaration laws, making it easier for financial criminals to ply their trade.
Read more on this story at Intellinews.
Find out how to improve your AML processes with award winning technology.
Get in touch to see how our intelligent compliance solution can help your organisation or request a demo to see it in action.