Visa snaps up Featurespace, Nash and Glass join ‘IAFCS2024’ line-up for London, October 9, FCA signals shift on ‘name n shame’ policy

From Paul O'Donoghue at AMLi

FEATURESPACE: Visa’s topsy-turvy few days showed how quickly things move in the world of anti-financial crime.

Earlier this week the U.S. Department of Justice filed a lawsuit accusing Visa of an illegal monopoly.

Visa, one of the world's largest payment networks, processes more than 60% of debit transactions in the U.S., bringing it $7 billion each year in fees.

The U.S. claimed this amounts to illegal market domination. Unsurprisingly, Visa has claimed otherwise. The case is now set to run through the courts.

But the very next day, Visa’s week brightened considerably. The company confirmed it has bought Featurespace, an AI-driven crime prevention firm.

While the price, a reported $935 million, is high, the company is considered to be one of the best in the world in its field and should considerably improve the security of Visa payments.

Ralph Nash , Global Chief Risk and Compliance Officer, CMB – HSBC and Liesel Glass , Head of 1st LoD FC Central Risk at Danske Bank are joining the stellar line-up of speakers at ‘International Anti-Financial Crime Summit 2024’ in London on October 9 . It’s set to be the stand-out AFC event in the UK this year and will be officially opened by FATF President Elisa de Anda. Are you or your organization attending? Book your place here: International Anti-Financial Crime Summit 2024

FTX: The downfall of cryptocurrency exchange FTX, its founder Sam Bankman-Fried and the subsequent $8 billion fraud which was revealed has been one of the biggest fincrime stories of the decade.

Another chapter of it was closed this week with the sentencing of Caroline Ellison, who will serve two years in prison for her part in the scheme.

Ellison was the CEO of Alameda Research, the trading firm affiliated with FTX whose collapse was swiftly followed by that of the cryptocurrency exchange.

She was also Bankman-Friend's ex-girlfriend and the star witness in the criminal case against him, which finished with the FTX founder getting a 25 year jail sentence.

Because of this, prosecutors had argued for leniency, something likely reflected in her sentence length.

Two other former FTX executives who cooperated with prosecutors are scheduled to be sentenced in the coming weeks - all eyes will be on whether they will receive similar treatment.

FCA’S PLANS

NAME AND SHAME: One of the UK's top financial watchdogs has indicated yet again that it will water down its plans to "name and shame" some companies under investigation.

The Financial Conduct Authority has admitted that the move has become a controversial “lightning rod” and has said it will now take a “case-by-case” approach to naming firms.

Earlier this year, the regulator announced it planned to ‘name and shame’ financial institutions under investigation if it believes there is a public interest in doing so.

The idea was to discourage bad behavior by financial firms.

But the plans were immediately met with fierce pushback from businesses, who complained they were unfair against companies eventually found innocent.

The FCA has said it will unveil more details on how the plans will work later this autumn, but this is now the second time it has indicated it could be willing to dilute the measure.

COMPENSATION: Less controversial, at least for now, are the FCA's plans to change how e-payments customers get compensated if a firm goes bust.

Currently, customers of e-payment companies are not covered by the UK’s Financial Services Compensation Scheme which protects bank deposits of up to ￡85,000.

The FCA has said the result is that, in many cases where e-payments firms go bust, customers end up losing about half their money.

It has now proposed a series of changes, such as firms putting client funds into a statutory trust.

The regulator has estimated the moves will cost UK e-payments firms about ￡12 million.

INTERNATIONAL REGULATION

SANCTIONS: As the U.S. announced $8 billion in new aid for Ukraine, it also reiterated its pledge to cut off Russia’s ability to finance its invasion.

As part of this effort, the U.S. has announced sanctions against several cryptocurrency networks it has accused of facilitating Russian money laundering.

PM2BTC, a Russian virtual currency exchanger, was identified as being of "primary money laundering concern" linked to Russian illicit activities.

Cryptex, a virtual currency exchange registered in the Caribbean which operates in Russia, was also penalized.

U.S. officials have indicated that while Russia’s use of cryptocurrencies isn't significant yet, it could grow as sanctions tighten

SANDBOX: Finally, Ireland’s Central Bank has opened applications for its new ‘Sandbox’ scheme.

The program will allow financial institutions to test out new products while getting direct feedback from regulators.

The first sandbox program will start in December and run for six months. It will take a “thematic approach,” with the initial theme centered on developing solutions that reduce fraud and improve transaction security.

More details about the program can be found HERE.

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Have a great Friday ??

Stephen and the team at AMlintelligence.