• Digital Currencies

    Digital currencies are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

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Digital Currencies

Digital currency can mean a digital representation of either virtual currency or e-money and thus is often used interchangeably with the term “virtual currency”.

Decentralised, math-based virtual currencies have attracted increasing attention from an AML/CTF perspective because digital currencies are the wave of the future for payment systems.

Digital currencies may also provide a powerful new tool for criminals, terrorist financiers and other sanctions evaders to move and store illicit funds, out of the reach of law enforcement and other authorities.

What are the ML/FT Risks?

The Money Laundering and Financing Terrorism (ML/FT) risks associated with digital currencies include:

  • Convertible virtual currencies that can be exchanged for real money or other virtual currencies
  • Greater anonymity than traditional non-cash payment methods
  • Virtual currency systems can be traded on the Internet, are generally characterised by non-face- to-face customer relationships
  • Permit anonymous funding (cash funding or third-party funding through virtual exchangers that do not properly identify the funding source)
  • Permit anonymous transfers, if sender and recipient are not adequately identified.

Digital currency providers must ensure the organisation conducts a comprehensive ML/FT risk assessment to identify, assess, mitigate and manage ML/FT risk exposures is a critical first step in complying with AML/CFT laws.

What are the core AML/CFT obligations?

Regulated entities, in developing responses to obligations under AML/CFT laws and regulations, must:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment
  • Develop an AML Program that is proportionate to ML/FT Risks
  • Establish a Customer Due Diligence (CDD) Program including PEP screening; collection and verification of know your customer (KYC) information with Enhanced and Ongoing CDD controls
  • Implement an ML/FT Risk Awareness Training Program
  • Establish Pre and Post Employment Screening
  • Appoint an AML Compliance Officer
  • Establish effective Board and Senior Management oversight of the AML/CFT Program
  • Establish Record-keeping controls.

What are the potential consequences of non-compliance?

Regulated entities that fail to comply with AML/CFT obligations expose themselves to a number of risks including:

  • Enforceable undertakings and/or fines imposed by regulators
  • Personal accountability for Board members, Senior Executives and other key functions
  • Reputation damage and loss of trust from shareholders, customers, employees, business associates and the general public
  • Loss of license to operate the business
  • Significant falls in the share price
  • Adverse media attention across social and mainstream media
  • Increased costs to conduct remediation activities
  • Enforced audit and continual reporting of ongoing progress to regulators
  • Management attention diverted away from running the business.

What are the key parts of the AML/CFT Program Manual?

Our AML/CFT Program Manual includes:

  • Comprehensive information about your business that will contextualise the ML/FT risk profile
  • A ML/FT risk assessment that allows you to identify, assess, mitigate and manage the real ML/TF risks faced by your business
  • An AML Program of controls that addresses your legal and regulatory obligations
  • Customer due diligence standards that align local know your customer requirements and international best practice
  • An AML Operating Manual that will ensure you implement the AML controls within your organisation.

How it works

Enter Company Information

The user is first required to select their country, industry group, industry sector and other information about the organisation which starts to tailor the program.

Complete ML/FT Risk Assessment

The user is then guided through an ML/FT risk assessment questionnaire covering environmental risk, customer risk, business profile risk, channel risk, product / services risk and country risk, which automatically creates a tailored ML/FT risk assessment.

Create the AML Program

Based on the information provided in the first two steps an industry specific AML Program is automatically created.

Create the Customer Due Diligence Standards

Based on the country selected, the customer due diligence standards will also be generated.

Create the Appendices

The AML/CFT Program includes a number of supporting documents including a glossary of key terms, a country risk assessment across 200+ countries and a reference library based on internationally recognised methodologies and frameworks.

Review and Publish All Documents

After creating all of the draft documents the user can review and edit these before committing their final changes and publishing the documents which renders them as final versions and stores these as PDF documents.

Create AML Operating Manual

The AML Operating Manual is also automatically created and is designed to guide you through the core elements required to implement the AML/CFT Program.

Update and Refresh

Our team will also monitor for changes in AML laws and regulations and update the AML/CFT Program to reflect AML guidance on new and emerging threats.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real world experience, has developed a AML/CFT Program Manual for digital currency providers that you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

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