How IMF’s plans for tokens could revolutionise fincrime battle, Bitcoin's German bank gets serious reprimand from BaFin, EBA issues new CASPs guidance

IT HAS EMERGED that three of the world’s cornerstone institutions – the International Monetary Fund (IMF), the World Bank and Bank for International Settlements – are to work together for the first time to “tokenise” financial instruments. And from a fincrime point of view this could make a lot of sense.

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The three institutions revealed that tokenisation opened up the possibility of encoding regulatory requirements to tackle money laundering. We take a closer look at what is involved following the announcement Tuesday and its impact on this sector.

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Meanwhile in Germany, the regulator #BaFin has reprimanded #Bitcoin-owned bank futurum for serious AML deficiencies.?The watchdog found fault with the bank’s due diligence requirements and iits ability to conduct suspicious transaction reporting. The bank must regularly report to BaFin on its progress in remedying the failings. The Bitcoin group acquired futurum bank in a merger that was announced in 2018 and completed in 2020. It was one of a number of German banks owned by the crypto company.

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Which makes the European Banking Authority’s (EBA) new guidelines to the AML supervisors of crypto-asset service providers (CASPs) very timely.?The new guidelines set clear expectations of the steps supervisors should take to identify and manage ML/TF risks in the sector. The #EBA said the move was “an important step forward in the EU’s fight against financial crime.”

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“CASPs can present high ML/TF risks. They also operate across borders. This is why a common supervisory approach to tackling ML/TF risks in that sector is important,” the Paris-based authority said.

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The Bank of Lithuania imposes a hefty €840,000 fine on Contis, a UK financial services company, for #AML failings. The regulator uncovers a trail of infringements, revealing critical oversights in information security and business continuity risk management.

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Meanwhile, two EU countries have taken a major role in tracing the Hamas’ money trail. Germany and the Netherlands are co-chairs of the newly formed "Counter Terrorist Financing Taskforce – Israel (CTFTI)." The task force is a group of 12 Financial Intelligence Units (FIUs) which have joined forces “to disrupt the international money flows related to Hamas and support global anti-terrorism efforts through the coordination of financial intelligence and information sharing,”

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The other two co-chairs of the group are the United States and Israel. Read more on this story on our homepage now.

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On a similar theme, a new front has emerged in Israel's battle against funding Iran-backed militant groups. Enter Tron, a fast-growing crypto network, outpacing Bitcoin in facilitating transfers associated with designated terror organizations. Insights from financial crime experts and blockchain investigators shed light on this unfolding chapter. We explore the impact of this latest crypto currency thru a CFT lens.

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Out of Italy there’s the astonishing story of mafia don Raffaele Imperiale who has come up with a headline grabbing ploy to avoid a lengthy custodial sentence. He has offered his private tropical island in Dubai – which he values at up to €70M - ?for less time in prison. The island, nestled in the "World" constellation off Dubai's coast, was acquired while Imperiale was on the run from Italian authorities. Imperiale was extradited to Italy by the UAE authorities who have so far resisted sending Kinahan cartel members to face justice in the EU despite them hiding in plain sight in Dubai. Imperiale is a close associate of the Kinahan mob. Interesting to see what happens nexct!

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Meanwhile in the UK the Solicitors Regulation Authority (SRA) has issued a ￡101,357 fine on a British law firm. The penalty stems from money laundering red flags identified in three property transactions, with two possibly involving sanctioned entities.

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Your news updates this week so far:

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WILL TOKEN PLANS REVOLUTIONISE AML BATTLE?:?THREE of the world's cornerstone institutions - the International Monetary Fund (IMF), the World Bank and Bank for International Settlements - are to work together for the first time to "tokenise" financial instruments. Tokenisation also opens up the possibility of encoding regulatory requirements to tackle money laundering, they said. The three global bodies today (Tuesday) said they were working on tokenising some of the financial instruments that underpin their global work.

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BAFIN REPRIMANDS BINANCE’S GERMAN BANK:?GERMAN financial watchdog BaFin found serious AML deficits at Bitcoin's bank Futurum.?The regulator has found fault with the bank's due diligence requirements and in suspicious transaction reporting.

The Federal Financial Supervisory Authority (BaFin) said it has ordered Futurum Bank AG to remedy the shortcomings in its AML/CFT precautions.

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ITALIAN MOBSTER’S DUBAI ISLAND GAMBIT:?A major Italian drug trafficker has?offered?to hand over his private tropical island he bought in Dubai for a reduced jail sentence. Raffaele Imperiale (49) bought the island, which is part of the “World” constellation of islands off the?coast?of Dubai, while on the run from Italian police. Extradited to Italy last year, the cocaine broker and close ally of the Kinahan cartel has told detectives the secrets of his 400kg-a-week cocaine business to lower his sentence.

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12 FIUs JOIN FORCES TO TACKLE HAMAS:?TWELVE international FIUs have?set?up the so-called “Counter Terrorist Financing Taskforce – Israel (CTFTI)” to target Hamas.?In a statement today, US FIU, #FinCEN, said the 12 countries had “established an international task force immediately following the brutal terror attacks by Hamas against Israel on October 7.” “The purpose of the task force is to combine and strengthen the efforts to disrupt the international money flows related to Hamas and support global anti-terrorism efforts through the coordination of financial intelligence and information sharing,” the US Treasury’s FinCEN said.

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***?The ’European Anti-Financial Crime Summit 2024’ is taking place in Dublin on May 16 2024. The leading AML and FCC conference attracts 450 decision-making executives from across the EU, UK and elsewhere. The 2024 will also feature the importance of the transatlantic FCC alliance. EAFCS2024 at the RDS convention centre in central Dublin next year will also have extended exhibition and networking opportunities. Have you booked your tickets yet? You can do so?HERE :?

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EBA ISSUES ITS AML GUIDANCE ON CASPs:?THE EUROPEAN BANKING Authority (EBA) extended its risk-based?AML/CFT supervision guidelines to the supervisors of crypto-asset service providers (CASPs).?The new guidelines set clear expectations of the steps supervisors should take to identify and manage ML/TF risks in the sector. The EBA said the move was "an important step forward in the EU’s fight against financial crime."

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VILNIUS FLEXES ITS AML MUSCLE:?THE Bank of Lithuania has?fined?UK financial services company, Contis €840,000 for AML failings.?The regulator found a trail of infringements by Contis which should the company overlooked crucial aspects of information security and business continuity risk management. This raised questions about the company’s commitment towards maintaining a solid framework of risk management. Contis has been ordered to rectify these violations by April of the upcoming year.

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HOW A NEW CRYPTO CURRENCY HAS OPENED A NEW CFT FRONT:?A new front has emerged in Israel's fight against the funding of Iran-backed militant groups from Hamas to Hezbollah: A fast-growing?crypto?network called Tron.?Quicker and cheaper than its larger rival Bitcoin, Tron has overtaken its rival as a platform for crypto transfers associated with groups designated as terror organizations by Israel, the United States and other countries, according to interviews with seven financial crime experts and blockchain investigations specialists. An analysis of crypto seizures announced by Israeli security services since 2021 reflects the trend, showing for the first time a sharp rise in the targeting of Tron wallets and a fall in Bitcoin wallet seizures.

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BRITISH LAW FIRM FINED:?The Solicitors Regulation Authority (SRA) has?fined?a British law firm ￡101,357 in the UK over money laundering red flags on three property transactions, two of which may have involved sanctioned entities.?The SRA said both the fee-earner and the compliance team at the firm missed, did not adequately act on or sufficiently record the red flags, demonstrating “a failure in the firm’s client onboarding and ongoing monitoring processes".

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