Newsletter (30 Sep – 06 Oct 2024)
Welcome to this week’s edition of the Global AML News Weekly Digest. Here are the top stories making headlines around the world:
1. Starling Bank Fined £29M For ‘Shockingly Lax’ Financial Crime Controls
Starling Bank has been penalized £29 million by the Financial Conduct Authority (FCA) for its inadequate financial crime controls, which the regulator described as “shockingly lax.” The FCA noted that the rapid growth of the bank—from 43,000 customers in 2017 to 3.6 million in 2023—was not matched by corresponding enhancements in its financial crime prevention systems. Founded in 2014 by Anne Boden and backed by Goldman Sachs, Starling Bank’s lapses have raised concerns about how its insufficient controls may have exposed the financial system to criminal activity and sanctions breaches.
2. UBS Faces Setback In Appeal Over Credit Suisse Money Laundering Case
UBS has encountered a significant hurdle as the Federal Criminal Court in Bellinzona rejected its requests to dismiss proceedings and suspend them pending a decision by the Federal Supreme Court. The ongoing appeal stems from the high-profile Credit Suisse money laundering case involving connections to the Bulgarian mafia. UBS’s appeal will not proceed until the Federal Supreme Court issues a ruling. This development adds to the complications surrounding UBS’s legal battles as it navigates through legacy issues tied to Credit Suisse.
3. RBI Urges Stricter Monitoring Of Gold Loan Companies Amid Compliance Lapses
The Reserve Bank of India (RBI) has issued warnings to gold loan companies after identifying multiple deficiencies in their loan operations. These included inadequate customer due diligence, improper gold valuation practices, and the lack of monitoring over the end-use of loans. This scrutiny comes amid significant growth in the gold loan sector, with portfolios expected to reach Rs 10 lakh crore by March 2025, despite regulatory crackdowns. The RBI is pushing for greater transparency, especially in loan auctions, to ensure borrowers are not unfairly treated in case of defaults.
4. UK Crypto ATM Operator Pleads Guilty To Fraud and Money Laundering
A UK-based crypto ATM operator, Olumide Osunkoya, pleaded guilty to charges of fraud and money laundering. Operating 11 unregistered crypto ATMs, Osunkoya’s business facilitated over £2.6 million in crypto transactions between 2021 and 2023, many of which were linked to money laundering and tax evasion activities. This marks the first prosecution under the UK’s regulations targeting financial crimes related to crypto. The FCA’s enforcement actions are a significant signal to other unregulated crypto operators in the country.
5. North Korea Loses Observer Status In Asia-Pacific Anti-Money Laundering Group
North Korea has been removed as an observer from the Asia Pacific Group on Money Laundering (APG) due to its non-compliance with group obligations. The decision, made unanimously at the 26th general assembly in the UAE, reflects concerns over North Korea’s lack of engagement in anti-money laundering and counter-terrorist financing measures. The APG, an intergovernmental body committed to global financial integrity, took action as North Korea failed to meet international expectations in combating financial crimes.
6. UK’s App Fraud Reimbursement Rule Takes Effect
Starting Monday, UK banks will be required to reimburse victims of authorized push payment (APP) fraud up to £85,000. The Payment Systems Regulator (PSR) introduced this rule following a rise in APP fraud cases, which cost the UK £433 million in 2023. Despite industry pushback and calls for a delay, the rule aims to offer stronger protections to customers who fall victim to fraudsters. The reimbursement cap was reduced from an earlier proposed limit of £415,000 to ensure more equitable fraud compensation.
Stay informed with our weekly digest, bringing you the most impactful news from around the globe. Thank you for reading!
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