CFLW contributes to ABN AMRO’s Webcast on Money Laundering with Cryptocurrencies

On the 31st of August 2020, ABN AMRO Bank hosted an internal webcast called ‘Compliance Insights’ with cryptocurrencies and money laundering as central theme. Three experts appeared as guests:

  • Frank Mulder, Head of Compliance for Privacy, Innovation and Technology of ABN AMRO Bank,
  • Isaac Ghariq, Consultant Implementation, Culture and Conduct of Private Banking of ABN AMRO Bank,
  • Our Founder and Managing Director, Dr Mark van Staalduinen

They shared insights on how criminals leverage on digital currency exchanges to launder money and implications it carries for the banking system.


Money laundering with cryptocurrencies

Since 2012, Dr Mark van Staalduinen has been working with INTERPOL, Europol and several national police forces on darknet and cryptocurrencies and the ways criminals abuse them for their purposes. These activities started a year after the first substantial illegal marketplace, The Silk Road, was established and grown to a well organised criminal ecosystem. The Silk Road has taken offline for years, but more than 100 new markets are making the ecosystem nowadays, where cryptocurrencies are the main payment method.

Last year, the Financial Action Task Force (FATF) has made a number of recommendations to regulate cryptocurrencies. This includes, having the Virtual Asset Service Provider to comply with Customer Due Diligence (CDD) measures such as Know Your Customer (KYC) and Suspicious Transaction Monitoring in order to operate from a specific country under the central bank regulations.

What challenges lies ahead

As shared by Dr Mark van Staalduinen, as long as cryptocurrencies remain in the virtual domain, there is flexibility for the criminals to carry out their operations in countries where regulations are less stringent. The bank serves as a gatekeeper for the entrance of these cryptocurrencies into the legitimate financial system. During the laundering process, criminals will spin the funds and make it increasingly harder for investigators to follow the assets. Once the money’s origin is properly murky, the funds are then transferred into the legitimate financial system through thre cryptocurrency exchanges. It is imperative for financial institutions to be aware of such global financial crime trends and to monitor funds received from exchanges in more detail.

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