The Trust Edition - September 2024

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

Industry Highlights

?? Digital Identity in the Era of AI ~ UN Summit

The "Digital Identity in the Era of AI" event, part of the UN Summit of the Future, recently took place and addressed global concerns surrounding AI's integration with digital identity systems. Experts and leaders highlighted the growing need for a secure, inclusive digital identity framework to protect individual rights while still supporting innovation.

The World Digital Technology Academy (WDTA) announced the new "AI Safety, Trust, and Responsibility" certification program. This program introduces AI security standards that aim to increase and improve transparency and accountability on a global scale.

The summit emphasized the importance of international cooperation, especially in empowering developing nations. The WDTA also revealed plans to establish headquarters in the Americas.

International cooperation on AI-related standards has become increasingly crucial

Peter Major, Vice Chair of the United Nations Commission on Science and Technology for Development and Founding Chairman of the WDTA, stated, "International cooperation on AI-related standards has become increasingly crucial as artificial intelligence continues to advance and impact various sectors globally. Achieving trustworthy AI is a global endeavor, demanding the creation of effective governance tools and processes that transcend national borders. Global standardization plays a crucial role in this context, providing a key avenue for promoting alignment on best practice and interoperability of AI governance regimes."

UN Secretary-General António Guterres similarly emphasized that the UN 2.0 would have a strong digital focus, highlighting the importance of global digital solutions in the face of AI developments. Find more information on the summit here.

???? FBI releases 2023 Cryptocurrency Fraud Report

The FBI released its 2023 Cryptocurrency Fraud Report on the 9th of September, which revealed more than 69,000 public complaints related to cyber-enabled crime and financial fraud through the crypto sector. The FBI’s Internet Crime Complaint Center (IC3) reported a shocking $5.6 billion in losses associated with these crimes.

The FBI’s Virtual Assets Unit, formed in 2022, continues to investigate these crimes, encouraging victims to report through the FBI’s Internet Crime Complaint Center.

$5.6 billion in reported losses from more than 69,000 complaints of cybercrime involving crypto in 2023.

FBI director Christopher Wray states, “Scams targeting investors who use cryptocurrency are skyrocketing in severity and complexity. The best way to help stop these crimes is for people to report them to ic3.gov, even if they did not suffer a financial loss. The information allows us to stay on top of emerging schemes?and criminals’ use of the latest technologies,?so we can keep the American public informed and go after those who commit these crimes.”

For full details, visit the FBI report and keep up with the latest in Crypto regulation with ComplyCube's Crypto guides.

?? Google Wallet is Set to Pilot New Digital ID Feature

Google Wallet is testing a new feature that allows users to store their U.S. passport as a digital ID. This feature aims to simplify the process of accessing and using passports through mobile devices, offering a secure, convenient alternative to physical documents.

The trial is part of Google’s broader push into digital identity solutions, which already includes driver’s licenses and state IDs in certain areas. This move reflects the growing trend toward digitization of personal identification for ease and security in daily transactions.

Read the full article here.

?? The Long-Lasting Effects of Fraud Unveiled

A recent piece by the Mirror unveils new research that underlines the long-lasting effects of fraud on victims, proving that 71% of victims (from a study that was carried out on over 1,000 people) suffered high stress levels and mental health issues (60%).

Jim Winters, head of financial crime at Nationwide Building Society, said, "Fraud is fraud, no matter how big or small, and it can have devastating effects." He urged victims to report crimes, even if losses were small, and called for a joined-up industry approach to tackling fraud.

Fraud is fraud, no matter how big or small, and it can have devastating effects

This research has been made public ahead of the upcoming fraud reimbursement rules, which will be implemented next month. The maximum reimbursement value for fraud victims under these future plans had been set at ￡415,000. However, the Payment Systems Regulator (PSR) has just announced that this will be lowered to ￡85,000. The consumer group Which? is urging the regulator to abide by its original plans due to the long-lasting emotional impact on victims.

A speaker on behalf of the Payment Systems Regulator (PSR) stated, "We recognize that fraud can have a devastating impact on people, which is why we have taken action to make reimbursement mandatory and ensure that consumers receive consistent levels of protection if they fall victim to an APP scam. These protections start for everyone on October 7."

Read the full story here.

?? Starling Bank Finds 28% of People Targeted By Voice Cloning Scams

Recent research carried out by Starling Bank finds that 28% of people have been targeted at least once in the past year by voice cloning deepfakes. Scammers look for videos that have been uploaded online and replicate the voice using AI technology.

Lisa Grahame, Cheif Information Security Officer at Starling, stated: "People regularly post content online which has recordings of their voice, without ever imagining it's making them more vulnerable to fraudsters."

Shockingly, scammers only need three seconds of audio to clone your voice. The UK's cybersecurity agency stated in January of this year that AI technology is making it increasingly difficult to spot phishing messages, in which victims are tricked into sharing personal details such as passwords.

For more information, read The Guardian's full piece here.

Regulatory Updates

???? Singapore Steps Up

Singapore is actively enhancing its AML/CFT regime, reaffirming its commitment to fighting money laundering and terrorist financing. Their new AML Act has now been announced, which is another step in the right direction for Singapore.

These changes in legislation will enable enhanced prosecution of offenders, as well as providing comprehensive supervision by the nation's regulators, aligning with international standards.

Prime Minister Lawrence Wong underlined Singapore's commitment to improving its stance on AML/CFT prosecution at the FATF Plenary earlier this year in June 2024. Wong stated that over the past few years, Singapore has “tightened [its] regulations to increase transparency on beneficial ownership; introduced new regulations; and strengthened existing laws to address risks related to virtual assets, as well as precious stones and metals dealers”.

The FATF's standards certainly move many nations in the right direction, aligning the international approach to AML & CFT. For more information on Singapore's new legislation, read Norton Rose's recent summary.

???? FATF Praises India's AML Success, but Stronger Crypto Sector Oversight is Needed

The FATF has recently praised India's clear progress in controlling money laundering, highlighting the nation's achievement in seizing criminal assets and stopping illicit financial flows.

The FATF report stresses that stronger oversight of the crypto industry is urgently needed to prevent financial crime.

However, concerns over the need for increased supervision of India's fast-growing crypto sector were also voiced. While India has achieved a lot in terms of its financial intelligence and its ability to enforce regulations to meet global standards, the need for increased regulation of virtual asset service providers (VASPs) cannot be overlooked.

Read the full piece here for more information.

ComplyCube News

??? Tarek, CEO and Founder of ComplyCube, Interviewed by the RegTech Times

The CEO and Founder of ComplyCube, Tarek Nechma, was recently interviewed by the RegTech Times. The piece highlights Tarek's impressive background and underlines the critical importance of the RegTech sector, discussing how RegTech is currently "revolutionizing the financial landscape".

RegTech is a fundamental shift in how we manage risk, achieve compliance, and enhance customer experience, leading to a more inclusive, transparent, and efficient ecosystem.

The article explores how ComplyCube's AI-powered platform streamlines ID verification (IDV), KYC, and AML compliance processes, providing efficient, scalable solutions across global markets. It also highlights plans for future growth, including expansion into new regions like MENA.

Read the full RegTech Times piece here.

?? New Guide: "The Bot Zoo"

?? Digital identity verification is urgently needed amongst social media platforms, as fake accounts are now able to interfere with global politics. Researchers have cataloged political bot use in massively bolstering the social media metrics of politicians and political candidates from Donald Trump to Rodrigo Duterte.

Several incidents have occurred regarding bot-driven communications in modern-day politics, including:

?? Chinese Spy Balloon (2024): Armies of bots battled on social media over the Chinese spy balloon incident. Researchers from Carnegie Mellon University examined?1.2 million tweets related to the incident, finding some interesting results. The Chinese tweets were mainly artificial, with 64% of the tweets written by bots.

?? Brexit Referendum (2016): Dr. Marco Bastos uncovered a network of social media bots that were used to saturate Twitter with electoral messages during the 2016 Brexit referendum campaign. The research found that 13,493 accounts tweeted within the two weeks before and after the referendum.

?? Reform UK (2024): A recent BBC news article reported that Reform UK has seen a rise in the polls following hundreds of repeated posts that are suspected to be malicious bots.

Academics at Cambridge University were able to classify political bots in 2020 based on their online behavior. This follows one of the earliest discussions of bot traffic carried out in 2005 by T. Holz, who first created a classification for bots that he coined “The Bot Zoo.”

Find the full guide on our website, in which we dive into how social media verification can help put an end to sophisticated bot scams.

?? 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.