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☆ The Justice Department just shut down little-known crypto exchange Bitzlato and arrested its Russian founder in what authorities claim is a huge blow to crypto crime
▼ + stars: | 2023-01-18 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +3 min

Bitzlato is a little-known crypto exchange that was just shut down by the Justice Department. FBI agents arrested Anatoly Legkodymov, the founder of crypto exchange Bitzlato, on Tuesday. US authorities alleged that the site laundered millions tied to illicit Russian finances. The Justice Department and Treasury Department allege that the Hong Kong-registered platform laundered more than $700 million, some of which were tied to illicit Russian finances. Bitzlato is a small crypto exchange, which hasn't received mainstream attention until Legkodymov's arrest.

☆ Lawyers Expect More Anti-Money-Laundering Whistleblowers Thanks to Legislation
▼ + stars: | 2023-01-12 | by ( Mengqi Sun | ) www.wsj.com time to read: +4 min

The Treasury Department’s anti-money-laundering whistleblower program, which was established in 2021 but has been viewed as lacking teeth, got a shakeup in the recent omnibus spending bill that lawyers predict will result in more whistleblower cases. The 2021 defense bill establishing the program laid out a maximum 30% cut for the whistleblower but listed no minimum. The new legislation also sets up a revolving fund at the Treasury Department used to pay whistleblowers with money collected from enforcement actions based on their tips. The overhauled whistleblower program will strengthen FinCEN’s enforcement capability, said Jason Zuckerman, a whistleblower lawyer at Zuckerman Law in Washington. “Creating a credible anti-money-laundering whistleblower program will encourage whistleblowers to come forward.”Write to Mengqi Sun at mengqi.sun@wsj.com

New York CNN —After years of legal battles, pontificating and theorizing, former President Donald Trump’s tax returns from 2015 to 2020 are now part of the public record. However, Trump’s tax returns raise numerous questions about the former president’s finances, his business activities, foreign ties and his charitable donations, among other issues. The tax returns do not show what the bank account was used for or how much money passed through it or to whom. The tax returns don’t say how much he lent them or why he gave them loans in the first place. Since 1977, the Internal Revenue Service has had a policy of auditing every president’s personal tax returns while they are in office.

☆ Treasury Proposal Lays Out Who Would Have Access to New Ownership Database
▼ + stars: | 2022-12-15 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

The latest rule lays out who will be able to use the information and how they can access its contents. The Treasury in its proposal said it would keep tight controls on information in the nonpublic registry, limiting access mostly to U.S. law enforcement and regulators. Any department employee whose duties require it will be able to access the database, including for tax administration purposes, according to the proposal. Federal agencies engaged in national security, intelligence and law enforcement also will have direct access to the database. Foreign government representatives, including law enforcement agencies in other countries, will be able to request information from the database through U.S. counterparts, according to the proposal.

Sen. Elizabeth Warren is introducing legislation Wednesday aimed at cracking down on money laundering in cryptocurrency. The Senate Banking Committee, which includes Warren, is holding a hearing Wednesday on the FTX debacle and aftermath. The bill would designate providers of digital asset wallets as money service businesses, bringing them under the authorities of the Bank Secrecy Act, which fights money laundering in the financial system. Further, it would prohibit financial institutions from dealing with services that blend the cryptocurrencies of users together, obscuring their origins. Warren has been an outspoken critic of FTX prior to Bankman-Fried’s indictment.

☆ Factbox: Major cryptocurrency cases probed by U.S. authorities
▼ + stars: | 2022-12-14 | by ( ) www.reuters.com time to read: +5 min

BITMEX EMPLOYEESEmployees of BitMEX, including the cryptocurrency exchange's founders, pleaded guilty this year to willfully failing to establish, implement and maintain programs to prevent money laundering. The firm's cofounders pleaded guilty in federal court in New York and each agreed to pay a $10 million criminal fine. Another of the firm's employees also pleaded guilty, and agreed to a $150,000 fine. ONECOIN LTDIn 2019, U.S. authorities charged the alleged leaders of a multibillion-dolar pyramid scheme involving a fraudulent cryptocurrency called OneCoin. After a six-month court battle, Telegram agreed to pay an $18.5 million civil penalty and return $1.2 billion to investors.

☆ Elizabeth Warren unveils bipartisan bill to crack down on crypto money laundering
▼ + stars: | 2022-12-14 | by ( Matt Egan | ) edition.cnn.com time to read: +6 min

New York CNN —As federal prosecutors seek to imprison former crypto darling Sam Bankman-Fried, Sen. Elizabeth Warren is attempting to push through Congress a bipartisan crackdown on money laundering in the crypto industry. Due to time constraints, the Warren-Marshall crypto legislation has little chance of getting through this Congress. The new bill, called the Digital Asset Anti-Money Laundering Act, would attack money laundering by attempting to bring the digital asset ecosystem into compliance with the existing system of anti-money laundering in the worldwide financial system. The Treasury Department warned earlier this year that ransomware hackers, drug traffickers and fraudsters are using digital assets to launder illicit proceeds. - Cracking down on digital asset ATMs by making sure operators and administrators submit and update the physical addresses of their kiosks.

☆ Sen. Warren demands answers from Silvergate Bank about its business dealings with FTX
▼ + stars: | 2022-12-06 | by ( Gretchen Morgenson | Gretchen Morgenson Is The Senior Financial Reporter For The Nbc News Investigative Unit. A Former Stockbroker | She Won The Pulitzer Prize In For Her | ) www.nbcnews.com time to read: +13 min

“Life as a crypto firm can be divided up into before Silvergate and after Silvergate,” Bankman-Fried gushed in a testimonial featured recently, and prominently, on Silvergate Bank’s website. But in a conversation with an investment manager, a former top FTX employee said Silvergate was FTX’s primary banking partner. As a regulated bank, Silvergate has a duty to monitor clients’ accounts for suspicious activities that could signal fraud, money laundering or tax evasion, the filings note. FTX frequently used the Silvergate Exchange Network, according to the former FTX employee with direct knowledge of the transactions. A Silvergate spokeswoman said the change reflected a shift in functions taken on by a new president at the bank.

☆ Russia Sanctions Disrupting Putin’s Military Efforts, Treasury Official Says
▼ + stars: | 2022-11-16 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

Sanctions on Russia have succeeded in disrupting the country’s military manufacturing industry and are squeezing its economy, a senior U.S. Treasury Department official said. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. “We’ve seen how fragile the supply chain is, frankly—we learned this during Covid—for his defensive efforts on the battlefield,” Mr. Nelson said, referring to Mr. Putin. Amid the unprecedented sanctions program against Russia and ongoing pressure campaigns against Iran, Venezuela and other nations, the Treasury has been reviewing more broadly how it uses sanctions. One measure the U.S. Treasury is taking to ensure its program remains potent is by hiring a chief sanctions economist to provide economic analysis around prospective sanctions actions, Mr. Nelson said.

☆ Small Business Group Challenges Law Requiring Corporate-Ownership Disclosure
▼ + stars: | 2022-11-15 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

A small business group is suing to block a law that was designed to stop money-laundering by rooting out the use of anonymous shell companies. The Corporate Transparency Act, the law’s formal name, was passed as part of annual defense spending legislation and signed into law last year. The group filed its lawsuit with Isaac Winkles of Huntsville, Ala., who owns a small business managing real-estate properties. The lawsuit poses a new challenge to FinCEN, which has already missed the mandated timeline for launching the corporate-ownership database. In addition to setting up the corporate-transparency database, the law also requires FinCEN to take a number of other steps—a whistleblower award program, among others—to strengthen the U.S.’s anti-money-laundering safeguards.

☆ Elon Musk addresses advertisers and asks them to keep using Twitter
▼ + stars: | 2022-11-09 | by ( Brian Fung | ) edition.cnn.com time to read: +6 min

To his critics, and to companies that have paused advertising on Twitter, Musk asked to be given a chance. Users who pay for Twitter Blue, the platform’s subscription service, will not be required to provide identifying information other than a credit card and a phone number, Musk confirmed. Brands will be expected to foot the bill for their own verification on Twitter Blue, Musk said. Yoel Roth, Twitter’s head of integrity and safety, said Twitter is increasing its investment in ideas to battle hateful content. Musk also described Twitter’s existing verification system as a “lords and peasants situation” and compared it to the American Revolutionary War.

☆ Reported Ransomware Incidents, Costs Soared in 2021, Treasury Says
▼ + stars: | 2022-11-04 | by ( James Rundle | ) www.wsj.com time to read: +4 min

U.S. banks flagged ransomware-related transactions adding up to more than $1 billion in 2021, the Treasury Department said, although risk experts said that barely scratches the surface of cybercrime’s true economic scale. In 2020, such transactions totaled $416 million across 487 reports. FinCEN is an arm of the Treasury that analyzes financial data to identify money laundering, terrorist financing and other crimes. Reports from the first six months of 2021 alone exceeded the total for all of 2020, FinCEN said, noting that around 75% of incidents in 2021 stemmed from Russia-based cyber actors. Newsletter Sign-up WSJ Pro Cybersecurity Cybersecurity news, analysis and insights from WSJ's global team of reporters and editors.

☆ U.S. says many ransomware attacks in late 2021 were connected to Russian actors
▼ + stars: | 2022-11-01 | by ( ) www.reuters.com time to read: 1 min

WASHINGTON, Nov 1 (Reuters) - Russia-related ransomware variants accounted for 75% of ransomware-related incidents reported to the U.S. Financial Crimes Enforcement Network (FinCEN) in the second half of 2021, the Treasury Department said in an analysis on Wednesday. FinCEN said it had received 1,489 ransomware-related filings worth nearly $1.2 billion in 2021, a 188% jump from the year before. The analysis was issued in response to the increase in number and severity of ransomware attacks against U.S. critical infrastructure since late 2020. Reporting by Daphne Psaledakis and Andrea Shalal, Editing by Rosalba O'BrienOur Standards: The Thomson Reuters Trust Principles.

☆ U.S. banks processed roughly $1.2 billion in ransomware payments in 2021, according to federal report
▼ + stars: | 2022-11-01 | by ( Chelsey Cox | ) www.cnbc.com time to read: +2 min

U.S. banks and financial institutions processed roughly $1.2 billion in likely ransomware payments in 2021, a new record and almost triple the amount in 2020, according to a federal financial crimes watchdog. The report reflects a sweeping government effort to identify and report ransomware attacks following the hacking of U.S.-based Colonial Pipeline's IT network in May 2021. FinCEN said there were 1,489 ransomware incidents costing nearly $1.2 billion last year, a substantial rise from $416 million in damages recorded in 2020, according to the report. The agency said four of the overall top five ransomware attacks reported during this period are tied to Russia. In March, Biden signed a measure requiring some businesses to report certain cyber incidents and ransomware payments to the Cybersecurity, Infrastructure and Security Agency.

☆ Crypto exchange Bittrex to pay $29-mln penalty to U.S. Treasury Department
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +2 min

Oct 11 (Reuters) - The U.S. Treasury Department said on Tuesday that cryptocurrency exchange Bittrex Inc had agreed to pay $29 mln in fines for "apparent violations" of sanctions on certain countries and anti-money laundering law. The Treasury Department's Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) had levied fines of about $24 million and $29 million, respectively, on Bittrex. Register now for FREE unlimited access to Reuters.com RegisterEffectively, Bittrex will have to pay a penalty of about $29 million. FinCEN said its investigation found that from February 2014 through December 2018, Bittrex did not maintain an effective anti-money laundering program. Bittrex in an emailed statement to Reuters said it was "pleased to have fully resolved" the matter with OFAC and FinCEN on mutually agreeable terms.

☆ Treasury Fines Crypto Exchange Bittrex $53 Million
▼ + stars: | 2022-10-11 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

The U.S. Treasury Department imposed two enforcement actions with fines totaling $53 million against cryptocurrency exchange Bittrex Inc. for alleged violations of sanctions and anti-money-laundering laws, the agency said Tuesday. The Treasury said Tuesday’s actions highlight the importance of crypto firms maintaining risk-based sanctions and anti-money-laundering compliance programs, and that noncompliance with these requirements can result in enforcement actions and exposure to potential abuse by illicit actors. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. PREVIEW OFAC alleged that Bittrex failed to prevent people located in jurisdictions facing U.S. sanctions, including Ukraine’s Crimea region, Cuba and Iran, from using its platform to conduct crypto transactions between 2014 and 2017. FinCEN said Bittrex also failed to file required suspicious activity reports between 2014 and 2017.

☆ Crypto Exchange Bittrex to Pay $29 Million Over Violating Sanctions
▼ + stars: | 2022-10-11 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

Cryptocurrency exchange Bittrex Inc. will pay $29 million to the U.S. Treasury Department to settle allegations that it violated sanctions and anti-money-laundering laws. The Treasury said Tuesday that fined Seattle-based Bittrex a total of $53 million: a $24 million penalty from the Office of Foreign Assets Control, the Treasury unit that enforces sanctions, and $29 million fine from the Financial Crimes Enforcement Network, which combats illicit finance. As a result, Bittrex will pay about $29 million out of pocket. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. Bittrex collected customers’ internet protocol address and physical address information when they joined the platform, OFAC said, but the exchange failed to screen this information for potential sanctions violations.

☆ Treasury fines crypto company $29.3 million for violating multiple U.S. sanctions, Bank Secrecy Act
▼ + stars: | 2022-10-11 | by ( Chelsey Cox | ) www.cnbc.com time to read: +4 min

U.S. Treasury Secretary Janet Yellen holds a news conference in the Cash Room at the U.S. Treasury Department in Washington, U.S. July 28, 2022. The Treasury Department fined a Washington-based cryptocurrency trading platform $29.3 million for violating multiple sanctions, including those prohibiting U.S. companies from doing business with individuals operating in Iran, Sudan, Syria, Cuba and the Crimea region of Ukraine, the agency announced Tuesday. The Treasury's Financial Crimes Enforcement Network division, or FinCen, imposed a total civil penalty of $29.3 million, which covers additional violations under the Bank Secrecy Act. FinCEN also discovered that the company did not maintain an effective anti-money laundering program from February 2014 through December 2018. A sanctions compliance program was not adopted until December 2015, though Bittrex began offering virtual currency services in early 2014.

☆ Crypto exchange Bittrex fined $53 mln by U.S. Treasury Dept
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +1 min

Oct 11 (Reuters) - The U.S. Treasury Department said on Tuesday that cryptocurrency exchange Bittrex Inc was fined about $53 million to settle "apparent violations" of U.S. sanctions on certain countries and anti-money laundering laws. The OFAC alleged that Bittrex failed to prevent people located in the sanctioned jurisdictions of Ukraine's Crimea region, Cuba, Iran, Sudan, and Syria from using its platform between March 2014 and December 2017. Register now for FREE unlimited access to Reuters.com RegisterThe FinCEN said its investigation found that from February 2014 through December 2018, Bittrex failed to maintain an effective anti-money laundering program. Bittrex in an emailed statement to Reuters said it was pleased to have fully resolved the matter with OFAC and FinCEN on "mutually agreeable terms". Register now for FREE unlimited access to Reuters.com RegisterReporting by Manya Saini in Bengaluru; Editing by Anil D'SilvaOur Standards: The Thomson Reuters Trust Principles.

☆ Treasury Lays Groundwork for Ownership Registry, but Questions Remain
▼ + stars: | 2022-10-07 | by ( Dylan Tokar | ) www.wsj.com time to read: +5 min

Providing ExemptionsAnother key issue addressed by FinCEN’s rule relates to which companies will have to submit beneficial ownership information. Lawmakers reasoned that ownership information for such companies already would be readily available, but the large carve-outs have sparked questions from some quarters. They will be given 30 days to report beneficial ownership information. The road aheadFinCEN’s work establishing the beneficial ownership database is far from done. The beneficial ownership law requires companies to certify their reports are accurate and imposes penalties for people who willfully provide false information.

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