Bitcoin

FATF Encourages More Cryptocurrency Monitoring

The Financial Action Task Force (FATF) has stated that the country needs to do more with regards to monitoring cryptocurrency. The report released from the task force essentially states that the country isn’t doing enough with regards to ensuring that cryptocurrency is used as conduit for terrorist financing and money laundering. For those who are unaware, the FATF is an organization formed by the G7 in order to address international money laundering.

Report Details

The report claims specifically that the UK faces severe threats from international terrorism, and that “virtual currency providers are not yet covered by AML/CFT requirements.”

The report elaborates: “The UK acknowledges the inherent vulnerabilities associated with the anonymity of VCs [virtual currencies], and while the risk of ML/TF in this area is assessed as low, the UK acknowledges that there are intelligence gaps and VCs are being used in illicit activity (particularly in online marketplaces for the sale and purchase of illicit goods and services).

It continues: “As a result, the UK intends to regulate virtual currency exchange providers under its implementation of the EU’s fifth Anti-Money Laundering Directive.”

Conclusions

The report actually praises the UK in terms of how it deals with financial crime. It states that the U.K. has a “robust understanding” of monitoring and preventative measures with regards to the issue, and noted the fact that it conducted thousands of investigations last year, which resulted in 1400 convictions.

The report does seem to imply that the cryptocurrency sector could be a weakness for criminals to exploit. However, it recognizes that as of right now, the issue is not a central threat to the country. Specifically, the report states: “This is an emerging risk and there is not yet evidence to suggest that broad scale ML/TF is occurring in the UK through this relatively small sector.

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Binance Freezes accounts associated with WEX exchange over money laundering claims

CEO and Co-founder of giant crypto-company Changpeang Zhao announced that they had shut WEX’s accounts and frozen all funds in them. This is following money laundering allegations leveled against the controversial exchanger-WEX, formerly known as BTC-E.

Binance had been accused on Twitter for being used to clean the proceeds of stolen funds. Binance, the biggest crypto exchange by trading volume, was quick to quell these accusations by freezing the alleged accounts. The CEO added that they were also willing to work with law enforcement if called upon.

Controversial Exchange

The dubious exchange has been marred with controversy for some time. It began off as BTC-e before running bankrupt. It later restarted on the domain WEX.nz with reports indicating that WEX had paid off 20% of BTC-e’s debts. After some time, WEX started selling crypto on its platform at overvalued prices. In July 2018 for instance, WEX sold BTC at $10,000 when other exchanges were selling it at slightly over $8,000.

The smoking gun was perhaps Maple Exchange’s hacking on October 28 when 8 BTC was stolen. Although Altcoin users were refunded, BTC and LTC was not refunded to users. Attention was called to the authorities via Twitter where crypto-investor Joseph Young complained of the scam.

Complains via Twitter

Similarly, another Twitter user called on Binance to the attention of another scam by WEX exchange. John James pointed out that WEX exchanger was directing proceeds of stolen funds to Binance. The latter was accused of being used to move millions of dollars’ worth of stolen funds from WEX users. He alleged that funds from WEX cold wallets came to Binance, indicating Binance aids in money laundering. This comes after reports emerged that trading services were not properly functioning on the exchange earlier in the week.

The accounts, frozen on October 25, had received $93,000 in ETH but it was not until Monday October 29 that the official communication was made. The company regretted that it had to deal ‘with the mess of another exchange’ according to the CEO. He conceded that that was among the shortcomings of a centralized system of exchange.

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