AML Regulations Could Affect Pink Diamonds, Bitcoin

February 18, 2016

Meeting anti-money laundering (AML) regulations may become more difficult for digital currencies such as Bitcoin and those in the finance, real estate and precious stones industries. According to recent news, several countries are considering expanding existing AML regulations or introducing new ones into the mix.

Australia is one such country. Earlier this year, sources reported that Australian authorities could tighten regulations to include real estate agents and precious stones dealers after a global watchdog red flagged possible illicit cash coming into the country.

These changes are reportedly in reaction to an influx of cash from wealthy international buyers purchasing Australian property and rare pink diamonds as a means of securing funds away from their tumultuous home markets.

Current Australian regulations may be particularly attractive to potential money launderers as foreigners are able to spend millions of dollars on gemstones or real estate without being required to provide proof of identify or their source of funds.

The Attorney General’s Department, which is responsible for Australia’s law and justice framework, has indicated that it will conduct a review of its rules in order to address these concerns.

A representative of the department also stated that regulations may expand to include lawyers, real estate agents, precious stones dealers and accountants—all services that are potentially high risk for money laundering.

EU Changes

Recent news also reveals that the European Commission has proposed regulating digital currency exchange—namely Bitcoin—to limit the opportunity for money laundering.

Under the scope of the Anti-Money Laundering directive, digital currency exchanges would be required to keep records of sensitive customer data records for virtual to real currency trades, limiting the anonymity associated with these exchanges.

A Commission document notes that this is especially important because “there seems to be a risk that virtual currencies may be used by terrorist organizations to conceal financial transactions, as these can be carried out anonymously.”

With the ever-increasing and expanding set of AML regulations, it’s more challenging than ever for banks, money services businesses (MSBs), insurance brokers, accountants and other financial professionals to ensure they are complying with regulations.

Our AML compliance solution monitors 100% of financial transactions and customer information to help financial institutions satisfy all of their AML requirements. To find out how we can help you maintain AML compliance, contact us.

About Andrew Simpson

Andrew Simpson (LinkedIn | Twitter) is Chief Operating Officer at CaseWare RCM and has more than 20 years of experience building businesses in the fields of information systems audit and security, data analytics, Anti-Money Laundering and forensics. He is a regular contributor to conferences and a recognized thought leader in financial crime management.

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