Money laundering Financial News

A new report from the United States Treasury Department analyzing decentralized finance concluded that actors from the Democratic People’s Republic of Korea as well as other scammers are able to exploit vulnerabilities to facilitate money laundering.

The North Korean cybercrime operator APT43 is using cloud computing to launder cryptocurrency, a report from cybersecurity service Mandiant has found. According to the researchers, the North Korean group uses “stolen crypto to mine for clean crypto.”

United States federal prosecutors have charged a former executive of the fraudulent cryptocurrency scheme OneCoin for her role in the operation, who now faces up to 40 years in prison after being extradited from Bulgaria.

The United States Justice Department announced on March 15 that it was pressing charges against a resident of Hanoi, Vietnam, in connection to the operation of the ChipMixer. The announcement came shortly after it became known that a Europol action led by German law enforcement had closed down the Vietnam-based crypto mixer.

According to The European Union Agency for Law Enforcement Cooperation, commonly known as Europol, on March 15, the agency seized assets of cryptocurrency mixer ChipMixer for its alleged involvement in money laundering activities. Total assets seized include 1,909.4 Bitcoin (BTC) in 55 transactions amounting to 44.2 million euros ($46 million). Decentralized finance analyst ZachXBT previously alleged on Nov. 25, 2022, that the hacker(s) of defunct cryptocurrency exchange FTX laundered 360 BTC ($5.9 million) using ChipMixer after an $372 million exploit. 

The Indian government introduced a significant notification on March 7, 2023 bringing into coverage various crypto intermediaries within the purview of the Prevention of Money Laundering Act, 2002 (PMLA). The move comes at a time when many crypto intermediaries are already facing investigations from the Enforcement Directive (ED), the enforcing agency of the PMLA. News reports suggest that over Rs 9 billion has already been attached as proceeds of crime in connection with crypto frauds.

Last year, the Union government amended the Income Tax Act to impose a 30 percent tax on the transfer of virtual digital assets (VDAs), with a 1 percent TDS requirement. This was hailed as a major step towards legitimising digital assets in India. On March 7, 2023, the Department of Revenue in the Ministry of Finance issued a landmark notification under the Prevention of Money Laundering Act, 2002 (PMLA) bringing VDAs within the purview of the Act. The PMLA gives the government the authority to notify/identify categories of individuals engaged in a ‘designated business or profession’, who would qualify as a ‘reporting entity’ (RE). This notification is significant since being a RE - which includes banks, financial institutions, intermediaries or a ‘person carrying on a designated business or profession’ - is the trigger for consequences and compliances under the Act. So far, beyond the financial services licensed players, the PMLA umbrella was extended to only casinos, the real estate sector, jewellers, and now the VDA players.

The top Russian anti-money laundering regulator says that it is “monitoring” over 25,000 crypto users – and claims it has sophisticated tools that let it detect illegal activities.

The new year began with the news that notable Web3 entrepreneur Kevin Rose fell victim to a phishing scam in which he lost over $1 million worth of nonfungible tokens (NFTs). 

money laundering laws will apply to trade in cryptocurrencies, the federal government said in a notification dated March 7. The exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets and the transfer of digital assets will be covered under money laundering laws, the notification said. The safekeeping or administration of virtual digital assets and the participation in financial services related to the offer and sale of virtual digital assets will also be covered, the notification added. India is yet to finalise legislation and regulations surrounding cryptocurrencies even as the country's central bank has cautioned against their use multiple times.

RBI has cautioned against the use of cryptocurrencies multiple times. (Representational)

Exchange and transfer of virtual digital assets would also fall under PMLA laws. (Representational)

According to a Feb. 2 report by Turkish news agency Anadolu, Spanish authorities have arrested the CEO, sales executive and marketing director of Hong Kong cryptocurrency exchange Bitzlato. In total, six Russian and Ukrainian nationals related to the exchange were arrested in a joint effort between France, Portugal, Cyprus and United States law enforcement. 

North Korean exploiters behind the Harmony Bridge attack continue to launder the funds stolen in June 2022. According to on-chain data revealed on Jan. 28 by blockchain sleuth ZachXBT, the perpetrators moved another $27.18 million in Ethereum (ETH) over the weekend.

The Ministry of Justice in South Korea announced plans to introduce a crypto tracking system to counter money laundering initiatives and recover funds linked to criminal activities.

Despite the plans to turn the region into a bustling crypto hub, the United Kingdom’s financial watchdog says it has given the all-clear to only 41 out of 300 crypto firm applications seeking regulatory approval to date.

Anatoly Legkodymov, the Russian founder of Hong Kong-registered crypto exchange Bitzlato, has been arrested by US authorities for allegedly processing $700 million in illicit funds. 

Sanctions aimed at decentralized crypto mixer Tornado Cash weren’t able to completely cut off its usage, though it has hamstrung the service, a blockchain analytics firm has shared.

Senator Elizabeth Warren has put forward a bipartisan bill that aims to crack down on money laundering loopholes in the crypto industry.

WazirX, Enforcement Directorate (ED) unfroze its bank accounts, which were earlier blocked to investigate money laundering acts. That said, the agency would continue to probe the matter. In a media release on Monday, the crypto exchange said that its bank accounts have been unfrozen after a month. WazirX can now continue its banking operations as usual. In August, ED conducted searches at the premises of M/s Zanmai Lab Pvt Ltd, the parent company of WazirX and its directors and froze the bank accounts for alleged money laundering. ED probed at least 10 cryptocurrency exchanges for allegedly laundering more than Rs 1,000 crore, identified as proceeds of crime from the firms accused in the instant loan-app case.

The recent searches carried out by the Enforcement Directorate (ED) at the premises of CoinSwitch Kuber were not related to alleged money laundering, Ashish Singhal, the chief executive officer of the cryptocurrency exchange, was reported as saying on August 27.