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U.S. - Crypto Enforcement Team and Cyber Fraud Initiative
On Wednesday (October 6), the U.S. Department of Justice (DOJ) announced two new actions to strengthen its cryptocurrency and cyber fraud enforcement.
The agency launched a National Cryptocurrency Enforcement Team (NCET) to “tackle complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors,” and the “Civil Cyber-Fraud Initiative” aimed to uncover cybersecurity-related fraud by government contractors and grant recipients.
The NCET will work on tracing and recovering assets lost to fraud and extortion, including cryptocurrency payments to ransomware groups, and will help the agency to increase its expertise in cryptocurrency and blockchain technologies.
The team will comprise attorneys from the DOJ’s money laundering and asset recovery section and computer crime section, as well as of assistant U.S. attorneys (AUSAs).
“Today we are launching the National Cryptocurrency Enforcement Team to draw on the Department’s cyber and money laundering expertise to strengthen our capacity to dismantle the financial entities that enable criminal actors to flourish — and quite frankly to profit — from abusing cryptocurrency platforms” said deputy attorney general Lisa Monaco.
Under the Civil Cyber-Fraud Initiative, the DOJ will use the False Claims Act to pursue cybersecurity-related fraud by government contractors and grant recipients, such as "knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches.”
Canada - New Payment Habits Will Last
As vaccines continue to roll out across the world and restrictions on movements begin to ease, new research from Payments Canada shows that payment habits developed during the pandemic are likely to last. According to the payment body’s survey, 43 percent of Canadians stated that the COVID-19 pandemic had changed their payment preferences to digital and contactless for the long term.
The number of online transfers made by Canadians using the Interac e-Transfer increased by 48 percent in 2020 (compared with 36 percent year-over-year growth in 2019). Interac’s funds transfer scheme allows bank customers to send money to each other and pay for goods and services online. The number of first-time Interac e-Transfer users was 43 percent higher compared with 2019, highlighting the willingness of consumers during the period, sometimes out of necessity, to change their payment habits.
Overall, non-cash transactions fell by 7 percent in Canada in 2020 to 16bn transactions, the first time there has been a decline in the number of payments in at least a decade. Although the pandemic has affected a significant shift to digital payments, overall transactions have fallen due to falling demand as a result of the pandemic. Comparatively, Canada is in line with many of its peers. UK Finance reported earlier in the year a similar decline of 5 percent to 29bn non-cash payments. However, the European Central Bank's (ECB) annual payments statistics release — known as the Blue Book — noted a 4 percent increase in non-cash payments across the EU.
Part of the reason for these variations may be due to the level of cash usage in these respective markets. Prior to the pandemic, Canada was already one of the most cashless societies on earth. According to Payments Canada, just 18 percent of transactions in 2019 were cash, falling to 17 percent in 2020. By contrast, in some key EU markets, cash still represented a significant share of payments prior to the pandemic. Therefore, as total demand for payments declined in 2020, markets with high cash usage could mitigate more of this loss through converting these payments to digital channels.
UK - PSR Hemsley Discusses Open Banking, Competition and Fraud
Although worried about unregulated card scheme fees, Chris Hemsley, managing director of the PSR, said in a speech at PayExpo that interbank payments can work well only if there is "sufficient diversity and rivalry" and a "right level of consumer protection".
Following the investigation into the OBIE, Hemsley stressed that "getting the right governance" and "effective regulation" are crucial to unlock the potential of open banking.
Noting that authorised push payment fraud has exceeded card fraud for the first time in history, Hemsley urged social media firms, payment firms, and sending banks to join forces to prevent and uncover frauds.
Poland - New Amendment Protects Cash Users
Poland has signed an amendment to its Payment Services Act, prohibiting businesses from refusing cash payments in exchange for their products or services. The amendment follows a recent survey by the National Bank of Poland, which found that 8 to 9 percent of the people surveyed were struggling to pay with cash.
In addition to the amendment, the Eastern European country is working on a national cash safety strategy aimed at ensuring free access to cash for all people who want to use this payment instrument.
U.S. - Secret Postal Banking Pilot Launched
The U.S. Postal Service (USPS) "quietly" launched a pilot program last month, offering check-cashing services to the public, the American Bankers Association (ABA) reported.
The pilot program is running at certain post office locations in four U.S. cities, including Washington, D.C., Baltimore, Falls Church, Virginia, and the Bronx, New York.
The USPS may later expand the program to offer additional services such as bill paying services, ATM access, expanded money order capabilities and expanded wire transfer capabilities, the ABA said citing press reports.
The idea of postal banking has been discussed by members of Congress for years. Democratic lawmakers have introduced several bills to enable the USPS to provide banking services. In April, a group of senators asked Congress to launch a postal banking pilot program to help reach un/underbanked people in rural and urban communities.
The U.S. is among the highest global users of checks. VIXIO's research shows that 13.5bn checks were processed in 2019, which is equivalent to two thirds of all global checks.
Asia-Pacific - AML Compliance Is Not A Game, NZ FMA
The New Zealand Financial Market Authority (FMA) has warned businesses that it does not tolerate non-compliance with the anti-money laundering (AML) law anymore.
The FMA's AML/CFT Monitoring Insights Report warned that "the rapid growth in customers trading online resulted in processes not being amended to effectively manage the risk of money laundering and terrorist financing within the business".
It advised reporting entities to review their risk assessments accordingly and determine whether they need to adjust their risk ratings.
"The AML/CFT regime has matured to a large extent and we therefore have less tolerance for non-compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act," the report says.
MENA - Six Firms Fined Dh17.3m For AML Failures
The Central Bank of the United Arab Emirates (CBUAE) has imposed a Dh17.3m (£3.4m) fine on six unnamed exchange houses for violating anti-money laundering (AML) and counter-terrorism financing laws, according to press reports.
The central bank has been an active enforcer of AML laws and, earlier in June, published AML guidance for financial institutions.
