Financial Crime, Fraud, AML, CTF

Many believe total anonymity is possible using privacy enhanced cryptocurrencies. It might not always be the case. Are popular cryptocurrencies like Bitcoin and Ethereum private? Absolutely not. There are privacy enhancing tools and techniques that can be used to obscure crypto transactions, but in general most cryptocurrencies leave a very convenient trail to trace for investigators and law enforcement. But not all cryptocurrencies are made the same. This article will provide a brief overview of the most private cryptocurrencies, how they’re used for user privacy and sometimes to avoid detection of fraud or other cybercrimes, and how they can still be traced by professional crypto investigators using advanced blockchain forensics. In case you’re unfamiliar with this topic, here’s a look at the 5 most common...

The DeFi revolution presents new risks and challenges for innovators, regulators, cybersecurity experts and early adopters of the powerful technology. These are the top 5. "Where money goes, crime is never far behind." In our new digital world this age-old saying still rings true, especially in regard to the emergent cryptocurrency and NFT landscapes. According to a recent report by blockchain analytics firm Elliptic, cybercriminals have laundered $4B through DEXs, bridges, and coin swaps since 2020. Much of that was related to the top 10 crypto hacks of all time, half of which have occurred since 2020, but much of it also comes from casual everyday scams and investment schemes that plague the crypto community. In this article we’ll discuss the 5 most...

The worlds of financial crime and cybercrime are colliding, converging into one. The biggest threat to businesses globally is the new cyber-enabled financial crime. Yet businesses and even financial institutions tasked with protecting our money continue to fight this combined threat with multiple separate defense systems and multiple separate defense teams. The situation is like a military leader trying to fight different enemies on different fronts. While those enemies remain in different fronts, it makes sense to send separate defense forces against them, each focused on fighting only the enemy assigned to it. But what if those enemies merge and launch joint attacks? A smart military leader would merge his forces against the joint attacks. That’s not happening in financial institutions,...

How would you picture those who work to prevent weapons of mass destruction (WMD) from falling into the wrong hands? Would you picture them heavily armed and with a military bearing? Then you might be surprised. Although such individuals sometimes fight the spread of WMD, the front lines feature a different type. The bulk of front-line defenders are less likely to have military backgrounds than financial ones. That’s because the most vulnerable place to identify and block those who spread WMD is through their financial dealings. So, we look at the world of sanctions violations and proliferation financing to see how those who traffic in such dangerous commerce are identified and thwarted. Understanding the terms Two key terms fill discussions of the fight...

Terrorist funding detection has been practiced the same way as money laundering detection ever since Counter Terrorism Funding (CTF) initiatives were added to Anti–Money Laundering (AML) efforts after 9/11. Although the two have similarities on the surface, a deeper look reveals more differences than similarities. In fact, some have rightly called terrorist funding “money laundering in reverse” because of marked differences in its sources and goals. Do the two warrant similar treatment in detection methods? Or do their dissimilarities call for different detection approaches? How are they similar? Money laundering and terrorist financing share three similarities: 1.    They involve a source of money or objects that have monetary value. 2.    They involve moving the money through channels that conceal the original source. 3.    This money movement and concealment...

In what ways has financial crime hurt you? Most people would respond with a yawn. We might think it is limited to a few fraudulent schemes that deprive a small number of people of a few hundred or a few thousand dollars. While we might sympathize with victims of such schemes, we often fail to see how far-reaching financial crime is. The reality is that financial crime affects every one of us personally, as well as impacting whole economies. So, what is financial crime? What does it do to us? And what is being done to fight it? What is financial crime? The term “financial crime” is an umbrella term covering a broad range of crimes rather than a specific act. Almost...

Money laundering is a crime that many people consider irrelevant to them. If a problem at all, they consider it a problem only for banks. That is far from true. Money laundering has massive effects not only on financial institutions, but also on governments, industries, economies and all individuals. What are the effects of these widespread crimes that fly under the radar of much of the population? And why are these effects so massive? Understanding the economic cost It’s hard to pin down a dollar amount for what money laundering costs the global economy. Normal economic activity measurements can’t track funds generated by activities that go to great lengths to remain hidden from public awareness. That hasn’t stopped organizations that fight these crimes,...