The Trust Edition | April 2024

🌎 This month's essential AML/KYC news, insights, and regulations from around the world.

Industry Highlights

🇺🇸 US War between Crypto Anonymity and Regulation

Privacy ideals and greater regulatory application continue to quarrel in the US. Samourai Wallet founders Keonne Rodriguez and William Lonergran Hill were arrested for facilitating roughly $2 Billion in what was labeled unlawful transactions, with over $100 million directly linked to the laundering of money from dark web revenues since 2015.

This taps into the recurring regulatory issue of how you regulate privately held wallets. For more information, read this Forbes article.

🇪🇺 EU Parliament Implements its New AML Framework

These new laws will increase the transparency of beneficial ownership information between national registries and parties with a ‘legitimate interest’, including journalists, media companies, supervisory bodies, and more.

As a byproduct, these laws also enable Financial Intelligence Units (FIUs) to detect cases of money laundering and terrorist financing more swiftly.

The laws incorporate the due diligence measures first released in January regarding ‘obliged entities’ such as banks, Crypto Asset Service Providers (CASPS), and some others.

From 2029, football clubs will also be subject to increasing due diligence measures. Clubs involved in high-value transactions between investors and sponsors will have to undergo a suite of due diligence and verification measures. For more information on the EU’s latest AML laws, click here.

🇸🇬 The $2 Billion Singaporean Money Laundering Case

10 Chinese nationals have laundered $2.2 Billion from overseas criminal activity. This is the largest money laundering case Singapore has ever dealt with, including banks, property agents, precious metals, and a golf club. This has duly raised concerns about its regulatory framework and ability to detect and prevent money laundering organizations.

The individuals involved are reported to have been using multiple passports each from regions including Cambodia, Vanuatu, Cyprus, and Dominica. All of which were used to bank successfully (deceptively) in Singapore for years. Read the BBC’s report on the topic here.

ComplyCube News

🏆 RegTech Partners of the Year Nominations

The British bank awards, run by Smart Money People , have shortlisted us as RegTech partner of the year! This nomination underscores the development of our suite of KYC and compliance tools, which are used by businesses worldwide to solve real-world issues.

🤝 ComplyCube Partners with Emigreat

We have partnered with Emigreat to optimize and innovate global HR transformation. Emigreat is fundamental for companies looking to negotiate complete international employment regulations.

ComplyCube's industry-leading Identity Verification (IDV) technologies will set new standards for security, compliance, and data use in HR management. Read more about this strategic partnership here.

📕 New Guide: Differentiating Between KYC Vendors

KYC vendors are no longer a rare breed, as multiple new and established tech firms are emerging to provide AML, KYC, and IDV as a service. However, KYC vendors that provide a truly comprehensive and global Know Your Customer solution are few and far between.

What your business should look for:

1. IDV solutions
2. Regional breadth of AML services
3. Scalability of these services
4. User Experience

Read our latest guide to discover what traits firms should look for when integrating with an AML and KYC vendor.

Cryptocurrency Market Hot Takes

🇭🇰 Hong Kong Launches Spot-Crypto ETFs

Hong Kong has launched multiple spot Bitcoin and Ethereum Exchange Traded Funds (ETFs), marking the globe's first Spot-Ethereum ETF. This is a significant development, particularly as American regulators, primarily the SEC, remain opposed to the product.

The Hong Kong listings also utilize a different mechanism called an 'in-kind redemption mechanism'. For more information, see our post below.

This grants Hong Kong first-mover status for Ethereum ETFs and demonstrates the region's forward-thinking attitude towards the crypto industry, both from a regulatory and product innovation perspective.

⚖️ Concensys Sues the SEC, Defending Ethereum

In 2023, the SEC launched an investigation into Ethereum to decipher whether or not it was, and should be, registered as a US Security. This was a heavy threat to the industry as there would be huge ramifications across the American crypto industry, such as fines and limited use of the blockchain on a retail level.

Concensys have declared that they feel "compelled to act". The SEC's stance on Ethereum has turned into a wider 'war on crypto', which has been a significant inhibitor to the development of crypto products in America.

Concensys's consensus (if you'll pardon the pun) is that the SEC should not be allowed to 'arbitrarily expand its jurisdiction' and that this unwarranted investigation has severely impeded the growth of the industry worldwide. Read Concensys's article on it here.

⛰️ Could 2025 Prove a Watershed Moment for Crypto Regulations?

The Financial Action Task Force (FATF) is scheduled to launch its 5th Round of Mutual Evaluations next year. This will include an analysis of the implementation of Recommendation 15, the Crypto Travel Rule.

We believe that 2025 could become a watershed moment for global cryptocurrency regulations as the institution will shed light on the real implementation of this policy around the world. Their latest statement over the policy's implementation was:

Implentation is pretty poor, over one third have not conducted a risk assessment.

If this statistic surprised you or you're curious about the Crypto Travel Rule, read our guide on it here.

👋 For more information on our suite of AML, KYC, and IDV services, start a conversation with one of our ComplyCube experts and find a solution today.