The Trust Edition - Feb 2024

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

Industry Highlights

🧺 $2 Billion Laundered Since 2017

Money Laundering as a Service is probably not a term you are familiar with, but that is precisely what this company was providing. A financial service out of Lithuania has been investigated, and its leaders have been detained on suspicion of laundering an estimated $2 billion since 2017.

The firm targeted thousands of institutions across the EU, using a complex framework of financial institutions to create false transactions. While this investigation was initiated in 2021, an action day on the 27th of February 2024 saw 18 perpetrators, including the 3 primary suspects, arrested. This institution has been directly related to broader Organized Crime.

Find out more about the topic here.

🇪🇺 The EU establishes its AML HQ in Frankfurt

The European Union has agreed on the location of its crowning AML jewel. The Anti Money Laundering Authority (AMLA) will have ultimate supervisory powers and authority over EU money laundering policies, with the ability to sanction and investigate obliged entities. (For more information on the EU's updated list of obliged entities, read last month's Trust Edition.)

This evidences the EU's commitment to safeguarding the financial industry and stopping money laundering at its root cause. This new initiative will begin operations in mid-2025 and will supervise up to 40 financial institutions that are assumed to be at high risk to money laundering and terrorism financing.

Read the European Council's Press Release for more information on this development.

🇬🇧 British Banks Face Increased FCA Probing

According to a Reuters report last week, the Financial Conduct Authority (FCA) is investigating Lloyds Bank's compliance and money laundering rules in Britain, focusing on its infrastructure for money laundering control.

Barclays also disclosed in its annual report that it had also been investigated by the FCA over its UK AML compliance framework, but the regulating body was closing its investigation.

These reports show an increasing movement, not just in Britain but in Europe in its entirety, towards increased federal development of AML regulations. The requirement for trust and transparency between financial institutions has never been higher.

For more information on these developments, read Reuter's report here.

ComplyCube News

💙 ComplyCube Launched KYV for Dating Services

KYV (Know Your Valentine) was an initiative to raise awareness of the fraudulent dangers associated with online dating. Dating apps face an industry-wide challenge to prevent catfishing, romance scams, and other kinds of exploitation.

This campaign was launched in the build-up to Valentine's Day and designed to boost the industry standard in identity verification and Know Your Customer strategies. For more information on this initiative, read our KYV blog here.

🧮 Cryptocurrency AML Figures

Money laundered through cryptocurrency services in 2022: $31.5 billion. Money laundered through cryptocurrency services in 2023: $22.5 billion.

While this shows a significant downturn in volume laundered, there are one or two caveats.

2024 is already proving to see significantly increased on-chain volumes, and it is generally conceded that the crypto market has entered a new bull market. Further to this, the concentration of illicit funds being funneled through 5 primary off-ramping services increased YoY from 68.7% in 2022 to 71.7% in 2023.

This shows a notable increase in the prevalence of illicit activities on the same 5 (undisclosed) platforms. The YoY trend from 2019 suggests that 2024 could see a further increase in the volume of money laundered via cryptocurrency platforms. This wouldn't be surprising, with the volume of on-chain activity expected to continue rising throughout 2024.

*Off-ramping services in crypto are platforms that facilitate transferring crypto assets into fiat currencies. These include centralized exchanges.

🌍 Global Online Safety and Age Verification Statistics

The world has embraced digital transformation, but has it embraced digital security? Global Age Verification Regulations are changing to safeguard young online users. See below:

🇺🇸 The Federal Trade Commission (FTC) issued a $170 million fine for COPPA violations. 🇬🇧 45% of young internet users in the UK reported coming across uncomfortable content online. 🇧🇷 Brazil plans to release a new age regulatory framework following projections that its gambling market will reach $1.7 billion by 2028.

Read our latest blog, what is an Online Age Verification System to find out more.

For more information on ComplyCube 's range of services, including AML, KYC, and IDV solutions, get in touch with one of our specialists and start a conversation today.