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Article
Publication date: 6 April 2012

Betty Santangelo, Donald J. Mosher, William I. Friedman and Matthew P. Truax

The purpose of the paper is to explain FinCEN's money services business rule (MSB Rule) revising the regulations that apply to MSBs.

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140

Abstract

Purpose

The purpose of the paper is to explain FinCEN's money services business rule (MSB Rule) revising the regulations that apply to MSBs.

Design/methodology/approach

The paper details the principal revisions in the new MSB Rule, including an amended definition of an MSB, an activity threshold, and applicability of the rule to foreign‐located MSBs, money transmitters, dealers in foreign exchange, check cashiers, and issuers of travelers' checks as defined in the rule.

Findings

The final rule clarifies which activities subject a person to the Bank Secrecy Act's rules pertaining to MSBs and subjects certain foreign‐located MSBs with a US presence to US rules.

Originality/value

The paper provides practical guidance from experienced financial services lawyers.

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Article
Publication date: 6 May 2014

Gary L. Moore

This paper aims to analyze thoroughly all of the sources of research used to develop the money laundering (ML) and terrorist financing (TF) low-risk rating, a rating…

Abstract

Purpose

This paper aims to analyze thoroughly all of the sources of research used to develop the money laundering (ML) and terrorist financing (TF) low-risk rating, a rating attained by Norway according to the Basel Institute of Governance, and determine the reasons why Norway is one of only two countries in the world according to the 2012 report, with the other being Estonia, to gain an overall low-risk ML and TF rating.

Design/methodology/approach

The differences between the USA and Norway which has obtained a low-risk ranking, were compared and contrasted.

Findings

Beginning with the Basel Institute Rating index as a legitimate source for use in assessing anti-money-laundering (AML)/TF risk, and the amount of documentation used in the index’s methodology, it has been proven that the low-risk rating Norway has received is well deserved, and that the US rating of medium risk is also deserved for the time the report was published. Achieving a low-risk rating is not as ambiguous as recently thought and neither is its application on a global scale.

Originality/value

The paper identifies practical areas of improvement and concerns in addressing the overall issue of ML and terrorist financing.

Details

Journal of Money Laundering Control, vol. 17 no. 2
Type: Research Article
ISSN: 1368-5201

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Article
Publication date: 27 September 2019

Mike Nonaka, Jenny Konko and Cody Gaffney

To summarize FinCEN’s new interpretive guidance on how its regulations apply to business models involving convertible virtual currencies (“CVCs”).

Abstract

Purpose

To summarize FinCEN’s new interpretive guidance on how its regulations apply to business models involving convertible virtual currencies (“CVCs”).

Design/methodology/approach

Highlights the most significant aspects of FinCEN’s CVC guidance, including several of the CVC business models discussed in the guidance.

Findings

FinCEN’s latest guidance does not create any new legal requirements but clarifies how existing regulations apply to business models involving CVCs.

Practical implications

Practitioners advising on CVC issues should be familiar with FinCEN’s latest guidance and how FinCEN regulations may impact their clients.

Originality/value

Highlights the most important takeaways from FinCEN’s guidance based on our firm’s experience in the CVC space. Lawyers representing clients on CVC issues will find this article valuable.

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Article
Publication date: 2 July 2019

Mohammed Ahmad Naheem

This paper aims to explore the implications of the 2014 Financial Action Task Force (FATF) publication and guidelines on virtual currency definitions and the overall…

Abstract

Purpose

This paper aims to explore the implications of the 2014 Financial Action Task Force (FATF) publication and guidelines on virtual currency definitions and the overall impact of blockchain technology on anti-money laundering (AML) compliance and regulation. The report cites three case study examples, which the FATF paper uses and which this paper questions as to their relevance, especially to the formal banking sector.

Design/methodology/approach

The paper has provided a critical analysis of a FATF publication and guideline document. Additional secondary data has been used on blockchain technology and to analyse the relevance and implications of the case studies used in the FATF document.

Findings

The main findings are that virtual currency technology has the potential to support AML frameworks within banking when and if they are better understood. However, generic case examples of virtual currency legal cases are not necessarily useful when developing AML risk assessment frameworks within the banking sector.

Practical implications

The implications from the research affect any financial organisation undertaking AML risk analysis or compliance especially for virtual currencies. It applies to the banking, insurance and auditing professions and is of interest to academics working on virtual and digital currencies.

Social implications

The social implications are that virtual currency technology can be used to add protection to banking transactions and could also be considered for client identity information such as beneficial ownership.

Originality/value

The originality of this paper is the topic of blockchain technology being considered in AML frameworks and the critical analysis of the FATF cases.

Details

Journal of Money Laundering Control, vol. 22 no. 3
Type: Research Article
ISSN: 1368-5201

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Book part
Publication date: 26 August 2019

Syed Fadhil Hanafi and Syed A Rahman

Regulation of digital currency is still at its infancy as authorities around the world grapple with its mechanics, and study its impact and the best method to regulate it…

Abstract

Regulation of digital currency is still at its infancy as authorities around the world grapple with its mechanics, and study its impact and the best method to regulate it. Significant increase in the use of digital cryptocurrency based on Blockchain technology post-Bitcoin phenomenon had challenged the conventional idea of central bank monopoly in currency issuance. This had also raised concern that digital currency being used as an instrumentality of crime given its anonymity feature that allows for the flow of funds without tracing and the fact that it is built on trustless system that provides security of transaction. This concern, plus other consideration including the prospect of issuing central bank digital currency, had driven some authorities around the world to adopt countermeasures either via an outright ban or a regulatory regime that suits the nature of digital currency, which is purely virtual and anonymous. However, in coming out with an appropriate legal regime, authorities faced multiple difficulties especially when the pace of legal development does not sync congruently with the rapid progress of technology. In addition, given the growing prominence of Islamic finance around the world, questions also arise pertaining to the legality of digital cryptocurrency from the Islamic perspective. Through a qualitative study of relevant literatures as well as legislations in different countries, this chapter discusses the various categories of digital currency, its position from the Islamic perspective, regulatory regimes of digital cryptocurrency in selected jurisdictions and challenges faced by authorities around the world in regulating this new medium of exchange.

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

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Article
Publication date: 24 July 2021

Noémi També Bearpark and Dionysios Demetis

This paper aims to explain the de-risking phenomenon through Luhmann’s risk/danger model and demonstrate that de-risking should be facilitated and encouraged.

Abstract

Purpose

This paper aims to explain the de-risking phenomenon through Luhmann’s risk/danger model and demonstrate that de-risking should be facilitated and encouraged.

Design/methodology/approach

The paper applies Luhmann’s system theory and more specifically his risk/danger model to describe the de-risking phenomenon and identify recommendations to address its consequences.

Findings

The paper finds that re-defining risk and the anti-money laundering (AML)’s community’s understanding of it can support key stakeholders’ understanding of money laundering (ML) risk and the way to better address consequences of AML decisions.

Practical implications

The paper has implications for the banking and regulatory community in relation to the interpretation of de-risking. As systems aim to minimise their exposure to risk, they should not be prevented from de-risking.

Originality/value

This paper aims to move away from a narrative description of AML phenomena and presents a theoretical foundation for the analysis of ML risk. The current response to de-risking which demonises it and aims to prevent it is deconstructed through this theoretical lens.

Details

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

Keywords

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Article
Publication date: 8 May 2018

Mohammed Ahmad Naheem

The purpose of this paper is to consider the recent (Dec`15) introduction of the Bitlicensing rules in New York and consider from a banking perspective how this will…

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18044

Abstract

Purpose

The purpose of this paper is to consider the recent (Dec`15) introduction of the Bitlicensing rules in New York and consider from a banking perspective how this will impact on their own risk assessment processes. The paper also outlines the challenges of applying financial regulation to companies that have an area of expertise and business that is more aligned to software development, rather than financial service provision.

Design/methodology/approach

This paper is a viewpoint paper, which offers a critical discussion on the FATF guidelines on virtual currencies. The paper compares developments that are currently occurring within the virtual currency sector in particularly the new Bitlicensing process in New York State and discusses the implications to the banking sector on risk assessment processes for virtual currency transactions.

Findings

This paper will benefit the banking and regulation industries as well as economic and banking academics and anyone with an interest in virtual and digital currency technology.

Originality/value

This paper is unique in that it examines the issue of virtual currency regulation from a banking perspective. It explains the virtual currency technology as a means to be enhancing banking risk assessment, for clients seeking to incorporate virtual currency transactions into their business. This paper impacts on the banking and regulatory sectors because it critically examines the current practice of over regulation and the impact that this has on alternative financial systems, such as digital and virtual currencies. The paper offers a theoretical framework as well as citing current practical reports of how regulation has already started to affect the financial services landscape. The impact of getting this wrong can lead to increased criminal activity, and this paper highlights how susceptible the financial sector is to this.

Details

Journal of Financial Crime, vol. 25 no. 2
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 1 September 2002

John A. Reynolds

The purpose of this analysis is to present the history of anti‐money laundering efforts in the United States as it applies both domestically and internationally, and…

Abstract

The purpose of this analysis is to present the history of anti‐money laundering efforts in the United States as it applies both domestically and internationally, and demonstrate how this new legislation, if enacted, will mark a dramatic change in the customary treatment of international financial transactions and to international long‐arm jurisdiction and law enforcement. If enacted as proposed, this legislation may provide the tools necessary to achieve substantial progress in this effort.

Details

Cross Cultural Management: An International Journal, vol. 9 no. 3
Type: Research Article
ISSN: 1352-7606

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Book part
Publication date: 26 August 2019

Abstract

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

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Article
Publication date: 7 January 2019

Angela S.M. Irwin and Caitlin Dawson

The purpose of this paper is to show how global regulation of cryptocurrencies and other cybercurrencies can assist in addressing the challenges of attribution when…

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1786

Abstract

Purpose

The purpose of this paper is to show how global regulation of cryptocurrencies and other cybercurrencies can assist in addressing the challenges of attribution when investigating ransomware attacks and other types of cybercrime using these payment methods.

Design/methodology/approach

A literature review, looking at current academic research and discourse on the topic cryptocurrency regulation, is conducted to highlight current thinking and perceived difficulties in implanting a global regulatory framework. In addition, the research explores how governments have addressed the risks posed by cryptocurrencies and how regulation has been implemented. The research focuses on the regulatory approaches of Australia, Europe and the Americas to determine whether they could feasibly address the risks posed by cryptocurrencies and be implemented on a global scale.

Findings

To date, few sustained efforts have been made to regulate Bitcoin or other cybercurrencies. Where regulation has been introduced, it has often proven too costly to implement, thereby, stifling Bitcoin industry growth, or too ad hoc to function effectively. These regulatory pitfalls are substantiated by the continuing difficulty faced by law enforcement agencies, in identifying individual Bitcoin users and separating those that are using them for nefarious purposes from those that are using them for legitimate ones. These challenges appear to grow exponentially when it comes to prosecuting criminals for Bitcoin-related offences, due to the enormous lack of agreement within the justice system of most countries as to the appropriate legal definition for Bitcoin. This research highlights three characteristics that will be vital to the success of any global regulatory framework. These are consistency, clarity and cost-effective implementation. A regulatory framework for Bitcoin that lacks any one of these elements will fail to meet the requirements of every stakeholder in the regulatory process. A framework that is too costly to implement will stifle fintech innovation, subsequently depriving national economies of the multitude of potential benefits promised by fostering fintech entrepreneurship. Equally, a framework that is inconsistent will hamper the global cooperation necessary to combat Bitcoin-related crime.

Originality/value

This research evaluates research, discourse and regulatory responses from academic and governmental sources and discusses how a global response to cryptocurrency regulation will help address the growing problem of attribution when it comes to ransomware attacks, which has experienced a considerable spike in recent months.

Details

Journal of Money Laundering Control, vol. 22 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

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