The country's largest crypto exchange said the Financial Intelligence Unit has been wrong in the past and had actions overturned in court.
Fintrac said the firm was fined for unreported activity including transactions tied to child sexual abuse material, fraud, ransomware payments and sanctions evasion.
Canada's FINTRAC said the exchange failed to report thousands of high-risk crypto transactions tied to darknet markets and Iranian transfers.
New updates have been made to Ripple’s XRP Ledger (XRPL) as the network looks to dominate and gain more traction. This is also a positive for XRP, which serves as the network’s bridge currency. Ripple’s XRP Ledger Gets A New Update In an X post, XRP validator Vet revealed that the credentials amendment on the XRP Ledger is now active. He explained that credentials can be applied to attest to compliance requirements, such as KYC and AML, for a user or institution and issued to their decentralized identity. This helps to further build trust in the network. Related Reading: Ripple Vs. SWIFT Battle Heating Up As Exec Lands Major Blow To XRP Vet also noted that the amendment has all been done natively on the XRP Ledger. Notably, this update is part of a larger move to enable compliance amendments on the network. With decentralized identities and credentials implemented, Vet indicated that their next focus is to work on the permissioned domains and permissioned DEX. Ripple and other XRP Ledger stakeholders aim to utilize these compliance amendments to attract more institutions to the network, enabling them to adhere to traditional finance (TradFi) standards even on-chain. This also comes as the network aims to become the go-to for tokenization. Ripple recently stated that 10% of global assets will become tokenized by 2030, and is undoubtedly looking to tap into this trillion-dollar market. Ripple Engineer Breaks Down Significance Of This Update In an X post, Ripple engineer Kenny explained that the credentials update gives developers and businesses a way to handle identity checks and compliance requirements directly on the XRP Ledger. With these, they do not need to approve each account one by one manually. The Ripple engineer noted that traditionally, verifying user credentials like KYC requires multiple checks across different platforms. Related Reading: Pundit Says Ripple Is The New SWIFT — Here’s What Is Driving It Kenny remarked that this process isn’t only inefficient but also increases privacy risks because sensitive information has to be shared multiple times. As such, this makes the XRP Ledger credentials update vital. The Ripple engineer revealed that this feature enables credentials to be issued, stored, and verified natively on the XRPL. He noted the benefits of how this allows users to prove a required criterion without undergoing repeated verification. Kenny also stated that this will improve the onboard process and enhance security, while maintaining privacy. The Ripple engineer further gave an example of what a typical flow will look like using this credentials feature. A business will define the credentials it requires, such as the KYC, then a trusted issuer creates and signs that credential. The user then accepts and stores these credentials in their XRP Ledger account. That way, the credential is checked on-chain whenever the user interacts with the business. At the time of writing, the XRP price is trading at around $2.83, up in the last 24 hours, according to data from CoinMarketCap. Featured image from Adobe Stock, chart from Tradingview.com
Binance Australia has 28 days to nominate external auditors for AUSTRAC's consideration.
Dubai has officially cemented its position at the forefront of global crypto regulation. This bold regulatory step positions Dubai as a global trailblazer in shaping the future of institutional crypto markets and blending innovation with compliance. As jurisdictions around the world debate how to handle digital assets, Dubai is already laying the groundwork for the financial infrastructure of tomorrow. Why This Approval Matters For Global Financial Markets The Virtual Assets Regulatory Authority (VARA) has officially approved the first-ever cryptocurrency options license, marking it a breakthrough moment for the emirate region’s rapidly evolving digital asset ecosystem. Related Reading: China Greenlights Launch Of Its First Crypto Stablecoin—Report As highlighted in the press release, the permit was granted to a Nomura-backed digital assets firm, Laser Digital. This permit has authorized the firm to offer over-the-counter (OTC) crypto options trading to institutional investors under VARA’s regulatory framework. This development solidifies Dubai’s status as a premier global hub for cryptocurrency and blockchain innovation. With VARA granting Dubai its first crypto options license, it provides a clear regulatory pathway for firms seeking to offer complex instruments and crypto derivatives. By doing so, Dubai is setting the bar for how governments can blend innovation with compliance. The approval of Laser Digital under VARA’s framework reflects a commitment to fostering a business-friendly environment with robust regulatory standards, including Anti-Money Laundering (AML) and know-your-customer (KYC) requirements. This gives institutional investors confidence that the space is both progressive and secure. Why Listed Spot Trading Launched Matters For US Crypto Markets While the first-ever cryptocurrency options license has been approved, the US Commodity Futures Trading Commission (CFTC), under Caroline D. Pham, has launched a listed spot crypto trading initiative. According to the release, this license opens the door for regulated exchanges such as the Chicago Mercantile Exchange (CME) to offer direct trading of real crypto tokens, not just for futures contracts, but under official United States oversight. Related Reading: Has The Crypto Market Bottomed? Analyst Says ‘This Is It’ It is important to note that spot trading is where you buy and sell the actual asset itself, such as Bitcoin or Ethereum, for immediate settlement, which hasn’t been regulated at the federal level. It’s different from trading futures or derivatives, where traders speculate on price without owning the asset. “Under President Trump’s strong leadership and vision, the CFTC is full speed ahead on enabling immediate trading of digital assets at the Federal level in coordination with the SEC’s Project Crypto,” Acting Chairman Pham stated. If this goes through, it would bring spot and futures trading under the same regulatory rulebook, making the crypto market simpler, clearer, and more secure for everyone involved, which is a step forward for the crypto industry. It will also pave the way for retail and institutional investors to engage in crypto markets with a higher level of trust, knowing that trading is taking place on federally regulated exchanges. Featured image from iStock, chart from Tradingview.com
The government also proposed setting an upper limit of 5,000 New Zealand dollars ($3,000) for international cash transfers.
What is crypto money laundering? Crypto money laundering involves concealing illegally obtained funds by funneling them through cryptocurrency transactions to obscure their origin. Criminals may operate offchain but move funds onchain to facilitate laundering.Traditionally, illicit money was moved using couriers or informal networks like Hawala. However, with the rise of digital assets, bad actors now exploit blockchain technology to transfer large amounts of money. With evolving techniques and increasing regulation, authorities continue working to track and mitigate the misuse of cryptocurrencies for money laundering.Thanks to sophisticated technologies like cryptocurrencies, criminals find moving large amounts of money simpler. As cryptocurrency adoption has grown, so has illicit activity within the space. In 2023, crypto wallets linked to unlawful activities transferred $22.2 billion, while in 2022, this figure stood at $31.5 billion. Stages of crypto money laundering Crypto money laundering follows a structured process designed to hide the source of illicit funds. Criminals use sophisticated methods to bypass regulatory oversight and Anti-Money Laundering (AML) measures. The process unfolds in several stages: Step 1 — Gathering funds: The first step involves gathering funds obtained illegally, often from organized crime or fraudulent activities. These illicit earnings need to be moved discreetly to avoid detection by regulatory authorities. Step 2 — Moving funds into the crypto ecosystem: Criminals now move illicit funds into the financial system by purchasing cryptocurrencies. The modus operandi is to buy cryptocurrencies through multiple transactions across crypto exchanges, particularly those with weak AML compliance. To make tracking more complex, they may convert funds into different digital assets like Ether (ETH), Polkadot (DOT) or Tether’s USDt (USDT). Step 3 — Juggling of funds: At this stage, the criminals hide the funds’ ownership. For this purpose, they move their crypto assets through a series of transactions across different platforms, exchanging one cryptocurrency for another. Often, funds are transferred between offshore and onshore accounts to further complicate tracing. Step 4 — Reintroducing cleaned money into the system: The final step involves reintroducing the cleaned money into the economy, which they do through a network of brokers and dealers. They now invest the money in businesses, real estate or luxury assets without raising suspicion.Did you know? Taiwan’s Financial Supervisory Commission has mandated that all local virtual asset service providers (VASPs) must adhere to new AML regulations by 2025. Various methods criminals use to launder cryptocurrencies Criminals employ several methods to launder illicitly obtained digital assets. From non-compliant exchanges to online gambling platforms, they use various techniques to conceal the transaction trail. Below is some brief information about the methods criminals use.Non-compliant centralized exchangesCriminals use non-compliant centralized exchanges or peer-to-peer (P2P) platforms to convert cryptocurrency to cash. Before being converted into fiat, the cryptocurrency is processed through intermediary services like mixers, bridges or decentralized finance (DeFi) protocols to obscure its origins. Despite compliance measures, centralized exchanges (CEXs) handled almost half of these funds. In 2022, nearly $23.8 billion in illicit cryptocurrency was exchanged, a 68% surge from 2021. Decentralized exchanges (DEXs)DEXs operate on a decentralized, peer-to-peer basis, meaning transactions occur directly between users using smart contracts rather than through a CEX. These exchanges are currently largely unregulated, which criminals use for swapping cryptocurrencies and making investigations harder.The absence of traditional Know Your Customer (KYC) and AML procedures on many DEXs allows for anonymous transactions.Mixing servicesCryptocurrency mixers, also called tumblers, enhance anonymity by pooling digital assets from numerous sources and redistributing them to new addresses randomly. They obscure the funds’ origins before they are sent to legitimate channels. A well-known example of criminals using crypto mixers is Tornado Cash, which was used to launder over $7 billion from 2019 until 2022. The developer of the mixer was arrested by Dutch authorities.Bridge protocolsCrosschain bridges, designed to transfer assets between blockchains, are exploited for money laundering. Criminals use these bridges to obscure the origin of illicit funds by moving them across multiple blockchains, making it harder for authorities to track transactions. By converting assets from transparent networks to privacy-enhanced blockchains, criminals evade scrutiny and reduce the risk of detection. The lack of uniform regulatory oversight across different chains facilitates illicit activity.Online gambling platformsCryptocurrency money launderers frequently exploit gambling platforms. They deposit funds from both traceable and anonymous sources, then either withdraw them directly or use collusive betting to obscure the funds’ origin. This process effectively “legitimizes” the money. The Financial Action Task Force (FATF), in its September 2020 report, identified gambling services as a money laundering risk, specifically highlighting suspicious fund flows to and from these platforms, especially when linked to known illicit sources.Nested servicesNested services encompass a wide range of services that function within one or more exchanges, using addresses provided by those exchanges. Some platforms have lenient compliance standards for nested services, creating opportunities for bad actors. On the blockchain ledger, transactions involving nested services appear as if they were conducted by the exchanges themselves rather than by the nested services or individual users behind them. Over-the-counter (OTC) brokers: A commonly used nested service for money laundering OTC brokers are the most prevalent nested service criminals use for crypto money laundering because they allow them to conduct large cryptocurrency transactions securely and efficiently with a degree of anonymity.Transactions may involve different cryptocurrencies, such as Bitcoin (BTC) and ETH, or facilitate conversions between crypto and fiat currencies, like BTC and euros. While OTC brokers match buyers and sellers in exchange for a commission, they do not participate in the negotiation process. Once the terms are set, the broker oversees the transfer of assets between parties.To combat North Korean cybercrime, the US government has taken strong action against the Lazarus Group’s money laundering activities. In August 2020, the US Department of Justice (DOJ) sought to seize 280 cryptocurrency addresses tied to $28.7 million in stolen funds following an investigation into a $250-million exchange heist.Further, in April 2023, the Office of Foreign Assets Control (OFAC) sanctioned three individuals, including two OTC traders, for aiding Lazarus Group in laundering illicit funds, highlighting the group’s continued reliance on OTC brokers.Did you know? Microsoft Threat Intelligence identifies Sapphire Sleet, a North Korean hacking group, as a key actor in crypto theft and corporate espionage. The evolving landscape of crypto money laundering, explained The complex landscape of crypto money laundering involves a dual infrastructure. While CEXs remain primary conduits for illicit funds, shifts are evident. Crosschain bridges and gambling platforms are witnessing increased usage, reflecting evolving criminal tactics. Analysis of deposit address concentrations and crime-specific patterns highlights vulnerabilities. Crypto money laundering infrastructureBroadly, crypto money laundering infrastructure can be categorized into intermediary services and wallets. Intermediary services include mixers, bridge protocols, decentralized finance (DeFi) protocols and other such services. On the other hand, fiat off-ramping services include any service that can help one convert crypto into fiat currency. While centralized exchanges are more commonly used for this purpose, criminals may also use P2P exchanges, gambling services and crypto ATMs. Crypto criminals use intermediary services to hide the origin of funds by concealing the onchain link between the source address and the current address.Key channels used for crypto money launderingDifferent financial services vary in their ability to combat money laundering. Centralized exchanges, for example, possess more control over transactions and have the authority to freeze assets linked to illicit or suspicious sources. However, DeFi protocols operate autonomously and do not hold user funds, making such interventions impractical. The transparency of blockchain technology enables analysts to track funds passing through DeFi platforms, which is often more difficult with centralized services. Centralized exchanges continue to be the primary destination for assets originating from illicit sources, with a relatively stable trend between 2019 and 2023. There was a significant uptick in ransomware proceeds being funneled to gambling platforms and an increase in ransomware wallets sending funds to bridges.Tracking illicit funds through deposit addressesDeposit addresses, which function similarly to bank accounts on centralized platforms, reveal how financial flows are concentrated. In 2023, a total of 109 exchange deposit addresses each received over $10 million in illicit crypto, collectively accounting for $3.4 billion. Comparatively, in 2022, only 40 addresses surpassed the $10 million mark, accumulating a combined total of just under $2 billion.The concentration of money laundering activity also varies by crime type. For instance, ransomware operators and vendors of illegal content exhibit a high degree of centralization. Seven key deposit addresses accounted for 51% of all funds from exchanges from illegal content vendors, while nine addresses handled 50.3% of ransomware proceeds. Criminals’ shift to crosschain and mixing servicesSophisticated criminals are increasingly turning to crosschain bridges and mixing services to obfuscate their financial transactions. Illicit crypto transfers through bridge protocols surged to $743.8 million in 2023, more than doubling from the $312.2 million recorded in 2022. There has been a sharp rise in funds transferred to crosschain bridges from addresses linked to stolen assets. Cybercriminal organizations with advanced laundering techniques, such as North Korean hacking groups like Lazarus Group, leverage a diverse range of crypto services. Over time, they have adapted their strategies in response to enforcement actions. The shutdown of the Sinbad mixer in late 2023, for example, led these groups to shift toward other mixing services like YoMix, which operates on the darknet. National and international frameworks for crypto AML Governments worldwide have implemented laws and guidelines to prevent crypto money laundering. Various national jurisdictions have put in place regulatory frameworks to ensure compliance.United StatesThe Financial Crimes Enforcement Network (FinCEN) regulates crypto asset service providers to prevent money laundering in the US. Crypto exchanges function under the Bank Secrecy Act, which requires the exchanges to register with FinCEN and implement AML and Counter-Terrorist Financing programs. They have to maintain proper records and submit reports to authorities.CanadaCanada was the first country to introduce crypto-specific legislation against money laundering through Bill C-31 in 2014. Transactions involving virtual assets fall under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and related regulations, requiring compliance from entities dealing in digital currencies.European UnionThe Markets in Crypto-Assets (MiCA) Regulation aims to safeguard consumers from crypto-related financial risks. The EU-wide Anti-Money Laundering Authority (AMLA) has also been set up. Crypto Asset Service Providers (CASPs) must collect and share transaction data to ensure traceability, which aligns with global standards. SingaporeSingapore enforces strict AML regulations through the Payment Services Act, which governs digital payment token services. Companies must conduct customer due diligence and comply with AML and Countering the Financing of Terrorism (CFT) measures to operate legally.JapanJapan regulates cryptocurrency under the Act on Punishment of Organized Crimes and the Act on Prevention of Transfer of Criminal Proceeds, ensuring strict oversight to combat illicit financial activities.Countries also collaborate globally to deter crypto money laundering, forming organizations like the FATF. They are working together for regulatory alignment, information sharing and strengthening AML frameworks.Token issuers also play a crucial role in tackling illicit activities. Notably, stablecoins such as Tether’s USDt (USDT) and USDC (USDC), have built-in mechanisms that allow them to block funds associated with criminal activities, preventing further misuse. How to prevent crypto money laundering Crypto money laundering is evolving and is forcing authorities to adopt advanced blockchain analytics to track illicit transactions. Thus, law enforcement agencies must use sophisticated tools to detect suspicious activity and dismantle criminal networks. Law enforcement has become more adept at tracing illicit transactions, as demonstrated in cases like Silk Road, where blockchain analysis helped uncover criminal operations. However, by working with global bodies like the FATF and the European Commission, authorities can assess high-risk jurisdictions and mitigate threats to the financial system.For crypto service platforms, stringent KYC and AML protocols must be followed, especially for transactions from high-risk areas. Platforms should regularly audit transactions, monitor for suspicious patterns, and collaborate with law enforcement to respond quickly to potential laundering activities.Users also play a role by avoiding transactions with entities operating in high-risk regions and reporting suspicious activities. Familiarizing themselves with secure wallet practices and ensuring their own transactions are traceable (if required) by keeping records can help prevent accidental involvement in illegal activities. Strong cooperation across all parties is key to curbing crypto money laundering.
Wash trading and money laundering distort NFT markets, creating fake demand and facilitating illicit activities.
Banks will limit their crypto exposure as long as anti-money laundering risks are at play, according to investment bank TD Cowen.
One crypto executive speculates Warren’s letter is a veiled attempt to justify an expansion of regulation against “neutral crypto technology providers.”
Innovative challengers are building compliance into their DNA and outcompeting established players.
IMF recommended that Kenya overhaul outdated regulations, address scams and align its crypto framework with global standards for financial stability.
HashKey Europe has entered Ireland following its approval for a VASP license under MiCA regulations, enabling various crypto services.
Due to the alleged KYC violations, Upbit reportedly faces fines of $71,500 per case in addition to possible issues with Upbit’s business license renewal.
Crypto exchange Kraken has announced the delisting of Monero in the European Economic Area to maintain compliance with EU regulations.
He served four months in federal prison for charges including alleged violations of United States Anti-Money Laundering rules.
Dallas-based United Texas Bank is the latest crypto-friendly bank to face a cease and desist order from the US Federal Reserve, according to a press release issued on September 4, 2024. Federal Reserve Keeping A Close Eye On Bank’s Crypto Business The US Federal Reserve has identified United Texas bank as having “significant deficiencies” in […]
While Indian AML agencies have given Binance the green light to resume operations, authorities are still seeking $86 million in tax liabilities from the firm.
In a significant development for the cryptocurrency industry, United States Senator Roger Marshall has overturned his support for the Digital Asset Anti-Money Laundering Act (DAAMLA) Bill, a legislation introduced by Democratic Party Elizabeth Warren. Marshall’s move to back down from the bill indicates the growing concerns about the possible overreach of regulatory actions regarding the […]
FINTRAC reported that Binance facilitated 5,902 separate transactions of $10,000 or more in crypto from June 2021 to July 2023 and failed to register with the regulator.
Crypto Asset Service Providers (CASP) in Europe would have to implement stringent Know Your Customer (KYC) procedures to combat money laundering following the European Parliament greenlight of new Anti-Money Laundering Regulations (AMLR), according to an April 24 statement. According to the statement: “The new laws include enhanced due diligence measures and checks on customers’ identity, […]
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The crypto mixer allegedly handled $2 billion in unlawful transactions and facilitated $100 million in money laundering.
Crypto.com previously obtained a domestic virtual asset business license (VASP) in South Korea after acquiring local crypto exchange OKBit.
Two former hostages and families of victims killed in the Oct. 7 attacks are seeking damages from Binance, Iran anunder the United States Anti-Terrorism Act.
Vivek Ramaswamy and Ron DeSantis quit the U.S. presidential race, while Donald Trump promised to “never allow” a CBDC in the country.
Customer due diligence requirements for crypto firms may be more stringent than for banks, policy watchers told CoinDesk.
Crypto firms have to do checks on transactions of 1000 euro or more, and the framework adds measures to mitigate risks in transfers with self-hosted wallets.
EU-based crypto firms are now subject to guidance from the banking watchdog in its “fight against financial crime.”
Hiring policy is none of the senator’s business and lobbying is freedom of speech, Coin Center director Jerry Brito reminded her.