Easter week has offered no holiday for criminals or financial crime fighters, as an American cryptocurrency expert was jailed for conspiring to help North Korea evade US sanctions; Switzerland terminated an 11-year-old money laundering probe into Egypt’s ousted ex-president; and Chinese financial regulators proposed restrictive action on NFTs.
Find out more on these stories below.
American cryptocurrency developer jailed for planning to help North Korea evade US sanctions
On 12 April 2022, Singapore-based American cryptocurrency guru Virgil Griffith, was sentenced to 63 months in prison and to pay a $100,000 (£76,290) fine for planning to help the Democratic Republic of Korea (DPRK) evade US sanctions. American authorities believe his actions could’ve contributed to the DPKR regime’s ongoing nuclear arms proliferation, which also has the United Nations Security Council on heightened alert.
Griffith was arrested in November 2019 for conspiring to violate the provisions of the US Congress’ International Emergency Economic Powers Act (IEEPA), which affords the US President regulatory powers over commerce between US citizens and countries which present an acute danger to the security of the United States. The arrest followed Griffith disobeying the US State Department’s direct instruction to him to not attend North Korea’s Pyongyang Blockchain and Cryptocurrency Conference in April 2019.
Griffith pled guilty to the charges in September 2021, admitting that at the conference he presented technical know-how to largely North Korean attendees on using cryptocurrency and blockchain technology to possibly avoid sanctions and launder money. He also conceded that he drew up plans with others to develop North Korean cryptocurrency infrastructure and expertise as early as 2018.
Read more on this story at the South China Morning Post.
Swiss authorities drop 11-year-old money laundering probe into ousted Egyptian ex-president
The Office of the Attorney General (OAG) of Switzerland announced on 13 April 2022 that it will end its 11 year old investigation into alleged money laundering by the late former Egyptian President Hosni Mubarak, his sons, and several others. The decision followed a ruling by the European Union (EU) General Court on 6 April 2022 which conclusively abandoned EU sanctions against Mubarak and family.
The OAG probe was initiated in 2011 during the so-called Arab Spring revolution which ousted Mubarak and his government. At first, it targeted 14 suspects including Mubarak’s 2 sons, seized assets belonging to 28 individuals and 45 businesses, and investigated 140 flagged bank accounts in Switzerland. The suspects allegedly used the Swiss banking system to launder corruption-related funds.
Legal liaisons between Swiss and Egyptian authorities since 2011 have not always been fruitful, although in 2018 CHF32m (£26m) was repatriated to Egypt. The OAG is now set to unfreeze and release CHF400m (£325.83m) back to the appropriate beneficial owners.
Mubarak’s son, Gamal, responded to the OAG decision by noting that “after more than a decade of intrusive investigations, sanctions, and mutual legal assistance proceedings, [it] validates the position we have held all along."
Read more on this story at Reuters.
Chinese regulators try to balance benefits and financial crime risks of NFTs
The Securities Association of China (SAC) announced on 13 April 2022 that restrictions on non-fungible tokens (NFTs) should be implemented. The several-hundred-member strong SAC both acknowledged the potential benefits of regulated NFTs to the ‘cultural and creative’ industry, and brought attention the risks of money laundering and other financial crimes that these tokens can play a role in.
The SAC proposed a two-pronged initiative for managing NFTs:
- The implementation of NFTs should promote “industrial digitization and digital industrialization”. i.e., The claimed value of NFTs should be provable and lawful, and NFT product information should be accessible and accurate for consumers.
- The implementation of NFTs should see the proactive rooting out of illegal financial activities by vendors, and veer away from the ‘financialization and securitization’ of NFTS. Among the 6 guiding principles laid out are:
- To not use virtual currencies as pricing tools or collateral when trading in NFTs
- To rigorously adhere to customer identification protocols and co-operate with anti-money laundering practices
The SAC statement also directly addressed consumers, calling on them to “consciously resist NFT speculation… be vigilant and stay away from NFT-related illegal financial activities, and effectively safeguard their own property safety.”
Read more on this story at Yahoo Finance.
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