A Guide to Anti-Money Laundering for Crypto Firms
The pandemic has created an environment filled with new crimes targeting customers in new ways. When criminals are caught, regardless of the new behaviors created by COVID-19, adverse media can identify them when they try to onboard somewhere new and restart their criminal activity.
COVID-19 Adverse Media and Criminals
Coronavirus is a word filled with fear. It’s crippled the global economy and locked millions in their homes for weeks, maybe months. And for many that’s the least impact it’ll have.
Unfortunately, wherever there’s fear there’s exploitation, bad actors who seek to use the fear brought on by the virus to defraud and illicitly access funds. However, thanks to compliance teams, legal enforcement and journalism, these bad actors are caught or exposed.
Financial crime attacks are on the rise due to COVID-19 and adverse media is increasing as more criminals are being discovered. Staying on top of that much negative news is difficult at the best of times, but with lockdown in place, it’s become so much harder.
An actor behind the company Quantum Prevention CV Inc was recently arrested for selling false cures to the coronavirus. A doctor in California was charged with fraud by the FBI after claiming certain drugs cured the virus (and selling packs of fake cures) many others have been caught doing similar things.
Businesses cannot be expected to stay on top of every criminal endeavor in the world. Fortunately, they don’t need to. FATF has long recommended that FIs use adverse media and negative news tools to work in conjunction with customer onboarding.
These tools mean that with just one search businesses can see any news on a potential client and decide whether or not they want to be associated with them. Rather than having to trawl through Google with an endless search string and millions of results per customer. Even the most experienced compliance officer is unable to search and compile results as quickly as an effective adverse media tool.
Scams on the Rise
From the blessing loom ponzi scheme rampaging through social media right now to phishing attacks and other inventive fraud typologies, customers are exposed to more financial crime attack attempts now than they’ve ever been.
Regulated financial businesses are doing what they can to stem the tide of attacks and legal action is being brought against those who are caught. When that happens, adverse media and negative news tools become invaluable in preventing those who have tried to exploit the situation for their benefit from being able to prey on customers.
Not all of these attacks will be stopped. But that doesn’t mean that they go unnoticed or unpunished, FIUs and FCUs are adept at tracking down the perpetrator, especially when given a thick-file suspicious activity report to work from.
When a criminal is arrested or charged or imprisoned, even due to COVID-19, adverse media tools can equip compliance officers with the ability to detect them immediately. Not only does this prevent any bad actors from trying to run the same scams that had them imprisoned or charged, but it also makes onboarding customers a faster process.
COVID-19 Adverse Media is Everywhere
The once-in-a-generation (hopefully) environment that we’re all living in right now means that news is moving at a frenetic pace. Statistics are out of date every day and information is changing faster than usual. Criminals are moving just as quickly in a bid to stay profitable.
And stories on these crimes are moving just as fast. It can feel as though every day there’s new COVID-19 adverse media, whether it’s on price gouging, PPE scams or some other criminal opportunism.
Our AIM Insight solution for adverse media and negative news means your compliance team no longer need to search through pages of Google to find relevant information. Adverse media products vary greatly. But only ours is capable of reducing the cycle time of applications by 80%.
Machine learning is a term touted often, but when used in conjunction with Natural Language Processing in AIM Insight we’re able to scan and categorize between 10 to 20 million webpages per day. And have over 10 billion on record already.
Compliance doesn’t have to be painful. But it should always aim to prevent pain for customers. Right now, businesses have an opportunity to protect customers from unnecessary pain. They should make the most of it.
Originally published April 24, 2020, updated November 17, 2021
Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.
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