The new passive income

There is an old saying that goes something along the lines of “if you want to get rich during a gold rush, don’t mine for gold, sell the shovels”. There is a lot of truth to this and the wisdom of the statement is easily apparent through multiple verticals, not just mining. In the age of big data, don’t make the data, store it! So says Amazon as they rake in billions through Amazon Web Services fees.

Keeping with the plan of suppling the infrastructure rather than engage in the actual activity, we find another financial services provider who found money laundering just too profitable to turn away from. The cryptocurrency exchange Binance seemed to reason there was no need to engage in the overt criminal activity that generates the money when it’s just as profitable to turn a blind eye as the funds traveled through their networks. And in some cases they had to work to create “plausible deniability”.

In this special investigative report, Reuters claims that Binance, among other things, “acted against its own compliance department’s assessment by continuing to recruit customers in seven countries, including Russia and Ukraine, judged to be of “extreme” money-laundering risk”, and “watered down compliance rules” concerning Know Your Customer regulations.

The report highlights an even more pressing questions concerning cryptocurrency finance: Ethics and compliance according to whose standards? Who are the regulators? What countries rules do these multi-national “virtual” businesses adhere to? Who is the enforcer?

What a great time to be in the business of financial crime investigation and enforcement!

#cyficrime #AML