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Article
Publication date: 24 October 2023

Doron Goldbarsht

The rise of cryptocurrencies and other digital assets has triggered concerns about regulation and security. Governments and regulatory bodies are challenged to create frameworks…

Abstract

Purpose

The rise of cryptocurrencies and other digital assets has triggered concerns about regulation and security. Governments and regulatory bodies are challenged to create frameworks that protect consumers, combat money laundering and address risks linked to digital assets. Conventional approaches to confiscation and anti-money laundering are deemed insufficient in this evolving landscape. The absence of a central authority and the use of encryption hinder the identification of asset owners and the tracking of illicit activities. Moreover, the international and cross-border nature of digital assets complicates matters, demanding global coordination. The purpose of this study is to highlight that the effective combat of money laundering, legislative action, innovative investigative techniques and public–private partnerships are crucial.

Design/methodology/approach

The focal point of this paper is Australia’s approach to law enforcement in the realm of digital assets. It underscores the pivotal role of robust confiscation mechanisms in disrupting criminal networks operating through digital means. The paper firmly asserts that staying ahead of the curve and maintaining an agile stance is paramount. Criminals are quick to embrace emerging technologies, necessitating proactive measures from policymakers and law enforcement agencies.

Findings

It is argued that an agile and comprehensive approach is vital in countering money laundering, as criminals adapt to new technologies. Policymakers and law enforcement agencies must remain proactively ahead of these developments to efficiently identify, trace and seize digital assets involved in illicit activities, thereby safeguarding the integrity of the global financial system.

Originality/value

This paper provides a distinctive perspective by examining Australia’s legal anti-money laundering and counterterrorism financing framework, along with its law enforcement strategies within the realm of the digital asset landscape. While there is a plethora of literature on both asset confiscation and digital assets, there is a noticeable absence of exploration into their interplay, especially within the Australian context.

Details

Journal of Money Laundering Control, vol. 27 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

Abstract

Details

Compliance and Financial Crime Risk in Banks
Type: Book
ISBN: 978-1-83549-042-6

Article
Publication date: 14 August 2023

Dinesh Sivaguru and Kamal Tilakasiri

The purpose of the study is to examine the available literature to comprehend what the underground banking system is, for what purposes this method is used and how policymakers…

Abstract

Purpose

The purpose of the study is to examine the available literature to comprehend what the underground banking system is, for what purposes this method is used and how policymakers should proceed to address this issue.

Design/methodology/approach

The approach involved conducting this study and combining it with a critical analysis of the available literature as well as the available historical data. The sources the study has explored include government documents, public hearings, academic articles, case studies and articles available on the internet.

Findings

The study revealed prevention of illegal proceeds is critical, still regulating one entity, is a phenomenon of Boyle’s law, “squeezing the balloon”. If one end of the balloon is squeezed, making the volume smaller, the pressure inside increases, making the un-squeezed part of the balloon expand out. The real issue is not how criminals transfer their illegal earnings; it is the criminals themselves. Hence, the policy decision on this issue needs to be carefully considered.

Research limitations/implications

Due to the complexity of the operating system of Undiyal, this study had a number of limitations, as do many others. Firstly, there are no records of the Undiyal agents or the volumes of transactions publicly available. However, comprehending the scope of the underground operation that exists in the country is quite difficult.

Practical implications

The study contributes to the academic researchers grasping what type of future research should be focused on in this area according to the study.

Social implications

From the point of view of its practical application, the study seeks to resolve social issues that the middle-class population experiences on a daily basis and that have a huge and adverse impact on GDP.

Originality/value

To the best of the authors’ knowledge, this is an original contribution.

Details

Journal of Money Laundering Control, vol. 27 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 19 October 2023

Jaffar Yakkop Alkhayer and Chander Mohan Gupta

This paper aims to examine the options available to arbitrators when they suspect money laundering during arbitration proceedings, considering their compatibility with fundamental…

Abstract

Purpose

This paper aims to examine the options available to arbitrators when they suspect money laundering during arbitration proceedings, considering their compatibility with fundamental principles and concepts of arbitration.

Design/methodology/approach

Using a doctrinal analysis approach, the paper draws on legal principles, antimoney laundering regulations and relevant literature to explore the topic. It considers relevant international treaties, standards set by the financial action task force on money laundering, cases and arguments from legal analysts and experts.

Findings

The paper identifies three options for arbitrators: disregarding suspicions, initiating an investigation or terminating the proceedings. Disregarding suspicions is deemed inappropriate, as it may facilitate the concealment of financial crimes. Initiating an investigation is seen as a preferable option, aligning with the arbitrator’s role and the public interest in nullifying contracts linked to criminal conduct. Terminating the proceedings is not recommended, as it contradicts the principle of natural justice. The paper emphasizes the importance of reasonable grounds for suspicions, notifying the parties, and allowing them to address the concerns.

Originality/value

This paper contributes to the existing literature by comprehensively analyzing the compatibility of these options with arbitration principles and concepts. It underscores the need for clear laws and directives to guide arbitrators in addressing financial crimes within the arbitration process, maintaining a balance between party autonomy and preventing the misuse of arbitration for illicit activities.

Details

Journal of Money Laundering Control, vol. 27 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

Content available

Abstract

Details

Journal of Money Laundering Control, vol. 27 no. 2
Type: Research Article
ISSN: 1368-5201

Abstract

Details

Compliance and Financial Crime Risk in Banks
Type: Book
ISBN: 978-1-83549-042-6

Article
Publication date: 10 May 2023

Nasir Sultan, Norazida Mohamed, Mervyn Martin and Hafizah Mohd Latif

This study aims to examine the Financial Action Task Force’s recommendations on virtual currencies (VCs) and how Pakistan has responded to them.

Abstract

Purpose

This study aims to examine the Financial Action Task Force’s recommendations on virtual currencies (VCs) and how Pakistan has responded to them.

Design/methodology/approach

Qualitative document and jurisprudence analysis techniques were used to achieve the study’s goal.

Findings

According to this study, VCs are modern FinTech that no jurisdiction can ignore. However, Pakistan has not adopted regulations to govern VCs but comprehensively prohibits their use. It is primarily due to the apathy of various regimes and regulators. Furthermore, the geographical location, undocumented economy and rampant corruption could facilitate the abuse of VCs for money laundering.

Originality/value

This study has provided a significant overview for developing regulations for VCs in Pakistan and other developing jurisdictions with the same characteristics.

Details

Journal of Money Laundering Control, vol. 27 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 12 January 2023

Kenneth See

The purpose of this paper is to examine the currently known techniques to tackle money laundering in Bitcoin mixers, and examine what gaps exist that would allow a criminal to get…

Abstract

Purpose

The purpose of this paper is to examine the currently known techniques to tackle money laundering in Bitcoin mixers, and examine what gaps exist that would allow a criminal to get away with laundering Bitcoin obtained through illicit activities.

Design/methodology/approach

This paper first establishes the relevant properties of Bitcoin, how transactions occur over the Bitcoin network and then introduces the Bitcoin transaction graph as an important data structure for any analysis of Bitcoin transactions. Next, the paper outlines how Bitcoin mixing works, along with the relevant properties of mixers that would be relevant for money laundering. The paper then assesses the known methods for identifying mixed transactions within the Bitcoin network, followed by an assessment on identifying money laundering activities on known mixed transactions.

Findings

This paper argues that there remains a gap for criminals to launder money through Bitcoin mixing services as known methods would unlikely be able to trace a tainted transaction that goes through a decentralized mixer that uses off-chain communication techniques to coordinate the mixing and charges randomized mixing fees.

Research limitations/implications

The study of known methods is restricted to literature published in the public domain. There are private organizations that are tackling similar problems, but their methods are not published and therefore cannot be included in this paper.

Originality/value

To best of the author’s knowledge, this is the first paper that performs a contemporaneous review on anti-money laundering in the context of Bitcoin mixing. This paper could assist regulators and policymakers in their understanding of Bitcoin mixers and provide guidance on where they should focus their resources to address the money laundering problem of Bitcoin mixing.

Details

Journal of Financial Crime, vol. 31 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 16 June 2023

Marcus Smith and Milind Tiwari

This paper aims to explain the implications of the impending establishment of national blockchain infrastructure by governments around the world, and how these structures can be…

Abstract

Purpose

This paper aims to explain the implications of the impending establishment of national blockchain infrastructure by governments around the world, and how these structures can be integrated with existing legislation and assist in the prevention of financial crime.

Design/methodology/approach

The methodology used is a literature review and analysis of progress being made to establish national blockchain infrastructure. It provides a discussion of the connection between blockchain and financial crime, and how this infrastructure will interact with existing regulatory frameworks, and particularly, financial crime legislation.

Findings

This paper documents financial crime risks posed by digital currencies and smart contracts and the role that national blockchain infrastructure can potentially play in mitigating these risks. It highlights the need for governments to devote resources to developing this infrastructure and associated regulatory frameworks.

Originality/value

There are few, if any, academic papers in the financial crime, or wider literature, that have examined the potential for national blockchain infrastructures prevent financial crime, including the implications for existing regulation in the field.

Details

Journal of Financial Crime, vol. 31 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 19 May 2023

Mariam Aljassmi, Awadh Ahmed Mohammed Gamal, Norasibah Abdul Jalil, Joseph David and K. Kuperan Viswanathan

Despite the vulnerability of rapidly developing and emerging market economies, researchers have paid less attention to the determination of the size of money laundering (ML) in…

Abstract

Purpose

Despite the vulnerability of rapidly developing and emerging market economies, researchers have paid less attention to the determination of the size of money laundering (ML) in these economies, including the United Arab Emirates (the UAE). Therefore, this paper aims to estimate the magnitude of ML in the UAE between 1975 and 2020 based on the currency demand approach (CDA).

Design/methodology/approach

The study uses the Gregory–Hansen cointegration technique alongside the autoregressive distributed lag bounds testing procedure to estimate the CDA model.

Findings

The results illustrate that an amount equivalent to about 19.034% of the GDP is laundered in the UAE between 1975 and 2020, on average, with the value lying between 15.129% and 23.121%. In addition, the results demonstrate the importance of the real estate market, gold trade, remittance channels and the size of the underground economy in facilitating the laundering of illicit funds in the country.

Originality/value

To the best of the authors’ knowledge, the study is the pioneering attempt at estimating the amount of illicit funds laundered in the UAE. Besides, the adoption of a novel, yet robust, approach based on the modification of the CDA technique also sets the study apart as it ensures a correct, clear, unambiguous and indisputable estimate of the magnitude of ML is obtained. In addition, it is expected that the outcome of the study will expand the frontiers of knowledge among policy makers and relevant agencies and ensure the adoption of the most efficient and effective measures to curb the ML menace in the country.

Details

Journal of Money Laundering Control, vol. 27 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

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