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More AML-related Fraud in Banks: Need For New Crypto-friendly Regulations?

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money laundering, AML, crryptocurrency

Authorities and officials often cite money laundering and financial scams when discussing cryptocurrencies and decentralization. However, regulations, particularly outdated policies, are largely ineffective in combating such violations.

Many experts are now criticizing the old policies and regulations. These, experts claim, are largely unsuitable for the crypto sector.

Credit Suisse Fails to Meet Legal Obligations regarding Money Laundering

Credit Suisse based in Zurich fails to maintain legal obligations in order to prevent money laundering.

FINMA, the Swiss Financial Market Supervisory Authority said that it identified problems in the AML processes of the bank. In addition, it  also traced inadequacies in risk management and applied control mechanisms.

The authority has taken measures to step up the AML processes of the bank. It has involved third parties to monitor the execution of Credit Suisse’s steps as well.

The bank is thankful for FINMA’s “acknowledgement of the improvements that have been made to our compliance and control framework over the last few years.”

There is clearly a need to refine legal frameworks for the cryptocurrency and ICO spaces. Old policies and legislation might not necessarily be the best choice.

Strict Action For Failure to Report Fraud in India

Indian regulators is taking strict action for failure to report fraud.

The RBI (Reserve Bank of India) recently penalized three banks that failed to report accounts associated with fraud.

Furthermore, the central bank fined the Bank of India, the Union Bank of India, and the Bank of Maharashtra for contravention of the instructions of the RBI.

Cryptos and Terror Financing

Many claim that cryptos facilitate fund transfer opportunities to terrorist organizations and crime groups.

However, banks have also authorized such transfers.

Standard Chartered, the British Bank paid a penalty of $667 million for transferring billions of dollars through the US on behalf of the citizens of Iran.

“Cryptocurrencies and blockchain technology are not innately illicit and should not be feared,” reveals a recent report by a Washington D.C.-based Think Tank.

The cryptocurrency and blockchain technology is not ideal for those aiming to raise funds in the war-affected regions.

According to the report, “operating financially with digital currencies remains a fringe activity both among the general public and within the population of global jihadists.”

Experts also claim that most terrorist groups, particularly the jihadists, inhabit places that do not lend themselves easily to the use of cryptocurrencies.

 

 

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