WEF expert recommends strengthening the fight against money laundering
Banks are the main institutions through which money is laundered
Cryptocurrencies practically do not participate in obtaining illegal profits
International consortium of news organizations developing transparency standards.
To deal with financial crime, you need to identify cases of illegal profit. This is the opinion of Charles Delingpole, founder and CEO of ComplyAdvantage, who urged financial institutions around the world to tighten their fight against money laundering..
Banks must stop money laundering
It is necessary to block the channels of legalization of money obtained illegally. This will make it possible to effectively combat crimes such as arms, drug and human trafficking. This idea was voiced by Charles Delingpole, Founder and CEO of ComplyAdvantage, who is an expert and speaker at the World Economic Forum conferences..
Money laundering has increased during the coronavirus pandemic, Delingpole said, as the priorities of international organizations and governments have shifted towards health and disease control. Illegally obtained profits were used to organize drug trafficking, trafficking in persons, weapons, and contraband goods. As a result, 21 million people worldwide have become victims of forced labor. Most of them are engaged in the sale of drugs, prostitution and other criminal activities..
Delingpole emphasized that criminals are smart, and serious steps must be taken to block their access to the financial system..
“Understanding how criminals gain access to the financial system, why financial institutions are grappling with efforts to tackle financial crime and how they prioritize them is essential and will help identify gaps in the system so they can be closed. Only when you fully understand the context of why change is needed can you bring about change, ”he said..
The expert applies primarily to banking organizations. According to FinCEN, it is the large banks that are involved in money laundering. Between 2000 and 2017, more than $ 2 trillion was laundered through central and largest private banks. Among them are such financial organizations as HSBC, the Central Bank of the UAE and others.
Financial Times Panel: Banks as conduits for financial crime – action on money laundering
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Explainer: How Dirty Money Is Laundered Through Banks
Earlier, the Financial Intelligence Unit of the Mexican Ministry of Finance confirmed that the banks that are part of the so-called G7 are most often used for money laundering. Also, the risk group included such organizations as brokerage houses, exchange offices, as well as several commercial banks. These structures account for about 80% of money laundering cases..
Cryptocurrencies are not suitable for money laundering
Despite the fact that cryptocurrencies are often associated with the black market, they are less involved in money laundering. According to Chainanalysis, cryptocurrencies account for no more than 1.1% of suspicious transactions in the world. That is, cryptocurrencies are the most transparent payment method, and each completed transaction can be tracked using special analytical services..
The same opinion is shared by the CEO of the cryptocurrency exchange Binance Changpeng Zhao. In a recent interview with Forbes, he stated that the world cannot be divided into black and white: not all banks are guilty of money laundering, just as not all cryptocurrency companies are clean on hand. Nevertheless, the strictest control has been established for the cryptocurrency market, so it will not work to transfer a large amount without personal identification..
However, recent research shows that more than half of cryptocurrency exchanges have weak protection against money laundering. This is the conclusion reached by the analytical blockchain company CipherTrace in its report on geographic risks for 2020. According to a published study, over 55% of global cryptocurrency trading platforms have weak client verification processes, which can play into the hands of attackers..
Europe is the leader in the largest number of crypto sites with imperfect Know Your Customer (KYC) procedures. Poland and Norway are in first place. The top five also include the USA, Great Britain and Russia.
COVID-19 and Corruption: Trade-Based Money Laundering
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