Friday's Final Word | Week 32

Welcome to Fourthline's weekly newsletter, where we share insights, developments, and the latest news to help keep you sharp! Enjoy ???

?? Fake guidebooks as the latest A.I. scam

?? How long can blockchain stay anonymous?

?? The Nigel Farage de-banking saga continues

?? KYC expands beyond banking

?? Banks receive significant fines for using WhatsApp

?? Back in Congress trying to regulate crypto

Know Your Customer or Know Your Author? How AI-Generated Guidebooks are Scamming Travelers

When talking of KYC, one naturally thinks about banks and other members of the financial sphere. However, as the case of A.I.-generated travel guidebooks shows, even places like Amazon should maybe focus more on who, or what, shows up on their platforms because the difference between good people, bad people, and non-real people is becoming harder to detect and fathom. The latest trend is a surge in fake travel books praised by fake reviews that convince the curious to spend money on generic thoughts written by, well, ghosts.

Read full article?here

Crypto’s Anonymous Appeal Clashes Regulatory Scrutiny

One of the main selling points of blockchain has been its ability to onboard customers without knowing their names, or pretty much anything else about their identity. While the decentralized ledger was transparent about all transactions that took place on a specific blockchain, it kept it a secret who was the one moving the money. This has made crypto particularly attractive for fraudulent activities, amongst them money laundering and drug trafficking. But, as crypto exchanges are dealing with increased regulatory scrutiny, a direct consequence of the many bankruptcies that have been scourging the Web3 landscape for the past year, the industry is forced to embrace KYC checks, a feature that might dampen its appeal as it contradicts the very essence of it.??

Read full article?here

Nigel Farage Finally Finds Himself a Bank

Nigel Farage, the “disingenuous grifter”, as one eloquent Coutts employee labelled him, has been back in the spotlight lately given his de-banking scandal, which, being the grifter he is, he has successfully exploited. It has resulted, so far, in two CEO resignations, and several stories from other prestigious de-banking victims who would seemingly corroborate his claim that UK banks are abusing their AML responsibilities to crusade against those who they politically disagree with. This might be just the conflation of two different topics by a politics-savvy media personality, however, it did grant him one more victory, namely the offer by London fintech Pockit that it will bank him.

Read full article?here

KYC Is No Longer Just a Practice in Banking as More Industries Strive for User Authenticity

Financial institutions are heavily regulated about who they onboard to their services, this leading them to become the first customers of identity verification companies. However, the tides are turning as more and more industries are embracing sophisticated background screenings in order to authenticate their user base. From streamlining employee onboarding to driver’s license checks on car-sharing platforms, KYC is here to expand its appeal, or at least this is what the increased number of customer deals for the identity verification market is implying.?

Read full article?here

WhatsApp Just Became Costly With the $549 Million in Fines Banks Received for Using It

Their use may be free, but not if you count the racked-up penalties banks received this Tuesday from U.S. regulators for using WhatsApp and Signal for messaging amongst their employees. American bank Wells Fargo takes the lead with a $200 million fine which it secured single-handedly, but European banks BNP Paribas and Société Générale are amongst those presented with hefty bills. The reason why these penalties were imposed by the Securities and Exchange Commission and the Commodity Futures Trading Commission is because when it comes to banking, there are serious recordkeeping requirements in place, something which the use of encrypted third-party messaging platforms blatantly violated. This practice of using unapproved communication methods has been going on for years, kickstarted by scandals about indiscriminating messages preserved in records of company emails, and exacerbated during the pandemic, when employees were constrained to home office.?

Read full article?here

The USA Has No Crypto Regulation Yet, But the Number of Contenders is Increasing – Who is Going to Win?

What do crypto miners and Wall Street banks have in common? Well, according to Sens. Elizabeth Warren and Roger Marshall the fact that they both meet the criteria to be viewed and treated as a financial institution. Based on the latest crypto proposal to (hopefully) become regulation, all “crypto participants”, amongst them wallet providers, miners and validators, should live up to the same compliance requirements which have been stipulated for banks and other financial organizations. Opponents of the Digital Asset Anti-Money Laundering Act of 2023 (the name of the proposed bill) say that such arduous requirements for small players will stifle innovation, and overall industry growth, whereas proponents cite the need for greater AML efforts, requiring all participants to follow the same set of regulations.??

Read full article?here

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