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FSB warns of emerging risks from crypto-assets to global financial stability

29 March 2022

Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system. This is the Financial Stability Board’s (FSB’s) updated assessment of risks to financial stability from crypto-assets, published on February 16th. The report examines developments and associated vulnerabilities relating to three segments of crypto-asset markets: unbacked crypto-assets (such as Bitcoin); stablecoins; and decentralised finance (DeFi) and crypto-asset trading platforms. It notes the close, complex and constantly evolving interrelationship between these three segments, which need to be considered holistically when assessing related financial stability risks. Continue reading…

The Compliance Cafe: The transnational fight against illicit money flows

21 March 2022
Knowledge Base

The European Compliance Center together with media partner Risk & Compliance Platform Europe, is pleased to present the launch of a new initiative, the Compliance Cafe. The Compliance Cafe is a series of monthly webinars with outstanding compliance professionals. The aim of these online sessions is to encourage interaction between compliance professionals from different countries to discuss current risk and compliance topics, such as money laundering and de-risking. The first Compliance Cafe webinar was held on January 26, 2022, on the topic of the peculiarities of the transnational fight against illicit money flows – regulations, institutions, and effectiveness. Continue reading…

11 suspects arrested in Romania, Belgium and Austria for stealing EUR 420 000 using cloned fuel cards

18 March 2022

During an action day, 11 suspects were arrested in Romania, Belgium and Austria, accused of stealing at least EUR 420 000 using cloned fuel cards in Belgium. In Romania, a total of 115 law enforcement officers from different units were deployed, including those specialising in combating organised crime. Eurojust supported the investigation led by Belgian authorities. The perpetrators allegedly used various skimming techniques to obtain the electronic data contained on the magnetic stripe of the original fuel cards and their PIN codes. With these electronic data, they cloned fuel cards that, with the use of the PIN code, allowed them to buy fuel and to upload money to the Belgian road-toll-reporting device without the intention of ever paying these amounts. Continue reading…

Five Italians face court in Romania and Italy, accused of defrauding EU agricultural funds

08 March 2022
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Eurojust supported the Romanian and Italian authorities in an investigation that concluded with the indictment of five Italian citizens accused of defrauding the EU of at least EUR 800 000 worth of EU agricultural funds. The fraudsters and four companies they set up first face trial in Romania. A trial for self money laundering will take place in Italy at a later date. Judicial authorities from Romania and Italy met yesterday in Enna, Italy, to evaluate the joint investigation team (JIT) that unveiled the fraud. The case was brought to Eurojust by the Romanian authorities in 2019. Continue reading…

Barclays fined £783,800 and agrees to make a voluntary payment to Premier FX customers

03 March 2022

The Financial Conduct Authority has fined Barclays Bank Plc (Barclays) £783,800 for oversight failings in its relationship with collapsed payments firm Premier FX. Barclays was Premier FX’s sole banker in the UK. The financial penalty takes into account that Barclays has agreed voluntarily to cover the losses of Premier FX customers whose claims have been accepted by Premier FX’s liquidators. Following the distribution by the liquidator amounting to 9p for every £1 lost, Barclays’ voluntary payment of £10,076,943.75 will make up the difference, meaning all 167 customers of Premier FX with accepted claims will have 100% of their money returned. The voluntary payment will be distributed to these customers by the liquidators by the end of March 2022. Continue reading…

Credit Suisse data leak: Billions of euros from illegal activities discovered in bank accounts

23 February 2022
Knowledge Base

by Dan Mihai

A leak inside the Swiss banking company Credit Suisse revealed the details of the accounts of more than 30,000 customers worldwide. These accounts hold a total of over 100 billion Swiss francs (€ 80 billion), some of which comes from illicit sources such as drug trafficking, human trafficking, money laundering and corruption. Thus, Credit Suisse is embroiled in a new controversy over its unethical discretionary policies and unclear customer selection and money-making procedures. Continue reading…

Digital currencies and the soul of money

07 February 2022
Knowledge Base

Agustín Carstens, General Manager of the BIS, Goethe University’s Institute for Law and Finance (ILF) recently delivered a speech at the conference on “Data, Digitalisation, the New Finance and Central Bank Digital Currencies: The Future of Banking and Money” on 18 January 2022. It’s an honour to deliver this speech at Goethe University. Of course, I wish I could have been in Frankfurt in person. In a speech at this university four years ago, I addressed the growth and pitfalls of cryptocurrencies such as Bitcoin. Since then, the debate on the future of money has grown much broader, but it continues to touch on the very foundations of the monetary system. Continue reading…

FCA commences criminal proceeding in relation to Collateral (UK) Ltd

20 January 2022
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The Financial Conduct Authority (FCA) has commenced criminal proceedings against the two former directors of Collateral (UK) Ltd (Collateral), Peter Currie and Andrew Currie, who each face two charges under the Fraud Act 2006 and one charge under the Proceeds of Crime Act 2000.  The FCA alleges that the Curries, who are brothers, dishonestly represented to investors that Collateral was authorised and regulated by the FCA to operate as a peer-to-peer lender knowing this was untrue. Continue reading…

EBA alerts on the detrimental impact of unwarranted de-risking and ineffective management of ML / TF risks

18 January 2022

The European Banking Authority (EBA) recently published its Opinion on the scale and impact of de-risking in the EU and the steps competent authorities should take to tackle unwarranted de-risking. Providing access to at least basic financial products and services is a prerequisite for the participation in modern economic and social life and de-risking, when unwarranted, can cause the financial exclusion of legitimate customers. It can also affect competition and financial stability. De-risking refers to decisions taken by financial institutions not to provide services to customers in certain risk categories. De-risking can be a legitimate risk management tool but it can also be a sign of ineffective money laundering (ML) and terrorist financing (TF) risk management, with at times severe consequences.

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There are no no-risk countries

13 January 2022
Knowledge Base

by Geert Vermeulen

Two former employees of Dutch social housing corporation Vestia have been convicted for corruption. One of them received a 2,5 year jail sentence and the other one was sentenced to 1 year in jail. Cleaning companies, window cleaners and contractors who worked for Vestia paid the two employees large money amounts and goods in kind to get assignments from the housing corporation. The father of one of the employees and two intermediaries were involved as well. The Vestia employees told the suppliers in advance what price they should offer. Vestia estimates that the total damage of the fraud for them has been around EUR 3 million.
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