Friday's Final Word | week 12
Good morning! Welcome to another Friday when we explore the latest developments in the financial crime landscape. Enjoy the update!
?? Can customers rely on their banks against scams?
?? Navigating MiCA with Fourthline
?? Cashless Sweden is fighting to defend cash
???? Russian developer faces trial in the Netherlands
??? Biometrics and payment security
?? Foreign policy: AI regulation in China
Are banks doing enough to protect customers from scams?
As financial scams become more sophisticated, aided by Generative AI and an increasing number of data breaches, Time Magazine asks the question about the extent of responsibility that banks should bear. Under today’s regulations, financial institutions are only required to compensate customers for “unauthorized” transactions, however, fraudsters are increasingly turning to techniques where they lure unwitting customers into approving false transfers voluntarily. Reimbursing these transactions doesn’t fall under banks’ responsibility, even though the technology exists to flag most false transactions that look fishy. To prompt financial institutions to take responsibility and adopt appropriate technology, regulatory changes may be necessary to address the evolving methods fraudsters employ to trick customers into paying.
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How to navigate crypto regulations with Fourthline: Spotlight on MiCA
As the EU’s ruling on crypto, named Markets in Crypto Assets (MiCA) regulation, is undergoing implementation, crypto players in the region must deal with a new priority – achieving compliance amidst increasing regulatory scrutiny. However, while this requirement is intended to bring market stability and transparency, there is obviously the disadvantage of increased costs and potential hurdles to the user onboarding journey. But, with the right compliance partner meeting regulatory requirements doesn’t have to be a complicated and expansive undertaking. Companies, such as Fourthline, are there to lend their services, so that crypto-engaged companies can keep on growing instead of spending vast resources on meeting compliance single-handedly.
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Swedish central bank calls for legislation to protect cash
Sweden is often hailed as a country on its way to becoming a cashless society, but this transition isn’t endorsed universally. Despite a gradual decline in cash circulation, the percentage of individuals concerned about this trend rose to 44% last year. Consequently, the Swedish central bank (Riksbank) is calling for legislation to protect cash, catering to those who rely on banknotes and coins on a daily basis. While the digitalization of payments is inevitable, ensuring accessibility to cash remains crucial for individuals and businesses facing challenges with digital technology, thus ensuring that payments can work for everybody.
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Russian developer is facing $1.2 billion money laundering trial in the Netherlands
Russian developer Alexey Pertsev stands accused of laundering $1.2 billion worth of crypto through an anonymizing tool named Tornado Cash. According to the Dutch indictment, the Russian software engineer has allegedly committed at least 40 instances of money laundering in recent years as his program was used to move crypto tokens out of crypto exchanges anonymously. Some of his developer peers are also facing allegations of money laundering in the United States, although not all under charges have yet been arrested. The accusations against Pertsev have caused an outcry in the developer community, fearful of a dangerous precedent where software developers get criminalized for their products’ potentially criminal use cases. The trial is set to take place on March 26 and 27 in Hertegenbosch.
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Is biometrics the future of payment security?
Which method do you find more secure and trustworthy: confirming a transaction with a four-digit PIN or by scanning your fingerprint? While using biometrics, such as eye scans and fingerprints, as an identification tool is nothing new, its potential integration into the payment process is certainly noteworthy. In KYC procedures, liveness checks and biometrics are already part of the digital onboarding journey, however, paying with your palm or just by holding your bank card with your fingertip is a different story, made possible by technology. But, regardless of the allure of this novelty, for the moment, questions remain about costs, security, and data storage. After all, while hacked PIN codes can be replaced, the same cannot be said for our fingerprints.
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Foreign policy: AI regulation in China
China is initiating a campaign to regulate generative AI, aiming to monitor and control its development amid concerns about its impact on political discourse and online content. The move reflects broader efforts to tighten internet regulation and address issues like scams and crime in the tech sector. Despite the government's interest in AI development, there are concerns about its ability to effectively regulate the industry and prevent fraudulent activities. The fate of cryptocurrency in China serves as a cautionary tale, highlighting the challenges of balancing innovation with regulatory oversight in the tech sector.
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