United States

Topic: Money laundering

Subscribe to Money laundering RSS feed

Broker-dealers can continue to rely on investment advisers for customer KYC requirements

In a December 12, 2018, letter to a US trade association with members that include broker-dealers in securities (“broker-dealers”), the US Securities and Exchange Commission (“SEC”) extended its no-action relief to broker-dealers who wish to rely on investment advisers to perform the broker-dealer’s obligations under US federal anti-money laundering (“AML”) customer identification program and beneficial … Continue Reading

Banking agencies and FinCEN encourage innovative efforts by banks to combat money laundering and terrorist financing

On December 3, 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Financial Crimes Enforcement Network (“FinCEN”), (collectively, the “Agencies”) issued a joint statement (“Joint Statement”) urging banks to consider, evaluate and potentially implement … Continue Reading

Iranian sanctions re-imposed and in full effect

As of November 5, 2018, all of the US sanctions that were lifted or waived in connection with the Joint Comprehensive Plan of Action (JCPOA), the 2016 nuclear deal among the United States and its allies and Iran, have been re-imposed and are in full effect. As a result, non-US companies can be subject to … Continue Reading

More guidance on the new FinCEN “beneficial ownership” rule

In May 2016, the Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, issued a final rule requiring that certain categories of financial institutions identify the beneficial owners of their legal entity customers and incorporate customer due diligence procedures into their required AML compliance programs. The regulation was effective … Continue Reading

FinCEN offers additional guidance on the “beneficial ownership rule”

In May 2016, the Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, issued a final rule requiring that certain categories of financial institutions identify the beneficial owners of their legal entity customers and incorporate customer due diligence procedures into their required AML compliance programs. The regulation was effective … Continue Reading

Coinbase ordered to give IRS information on 14,355 account holders

In an order dated November 28, 2017, a U.S. federal magistrate judge ordered cryptocurrency exchange Coinbase to turn over certain limited identifying information on 14,355 of their account holders to the U.S. Internal Revenue Service (IRS). This is the latest move in a case that began in 2016 when the IRS issued a so-called “John … Continue Reading

New York federal judge finds that bitcoins are “funds”

On September 19, 2016, a federal U.S. District Court judge in New York ruled in a pre-trial motion that bitcoins were “funds” for purposes of a federal indictment relating to illegal money transmitting business and money laundering. The decision comes less than two months after a Florida state criminal court judge found that bitcoin was … Continue Reading

United States bank regulators discuss their expectations regarding a bank’s correspondent banking activities

The U.S. banking regulators (the “Agencies”) recently issued a “fact sheet” discussing their supervisory expectations concerning banks’ anti-money laundering (AML) and economic sanctions obligations regarding the correspondent bank accounts they maintain for non-U.S. banks. Correspondent accounts, the accounts that banks maintain with each other to settle transactions and for other purposes, are vital to the … Continue Reading

Non-federally regulated banks to come under FinCEN’s AML umbrella

On August 25, 2016, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, issued a proposed rule that would extend US AML requirements for AML compliance programs to US banking entities that do not currently have a US federal bank regulator (which are the Federal Reserve Board, Federal Deposit Insurance Corporation and … Continue Reading

Putting management on the line: new New York AML/sanctions regulations look to senior management for written compliance finding

The New York State Department of Financial Services (“NY DFS”) recently finalized regulations (“Banking Regulations”) requiring state-chartered banking organizations, state-licensed branches and agencies of foreign banks, and state-licensed check cashers and money transmitters (“covered financial institutions”), to maintain “robust” transaction monitoring and filtering systems designed to better enable these financial institutions to comply with relevant … Continue Reading

Florida State criminal court judge finds that Bitcoin is not “money”

In a current money laundering prosecution in Miami, Florida, that has generated a lot of buzz in the press because it concerns Bitcoin, a Florida state trial judge ruled on July 22 that Bitcoin cannot be considered “money” under some of Florida’s state criminal laws. Given the particular facts of the case, however, it is … Continue Reading

FinCEN issues additional guidance on “beneficial ownership” rule

The Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, recently issued Frequently Asked Questions (FAQ) providing additional guidance on the final regulations that require that banking organizations, securities broker-dealers, mutual funds, futures commission merchants and introducing brokers in commodities (covered financial institutions) identify the beneficial owners of their … Continue Reading

NY DFS finalizes transaction monitoring regulations, tones down certification requirement

The New York State Department of Financial Services (“NY DFS”) recently issued final regulations to require state-chartered banking organizations, state-licensed branches and agencies of foreign banks, and state licensed check cashers and money transmitters (“covered institutions”), to put in place transaction monitoring and filtering systems designed to better enable these financial institutions to comply with … Continue Reading

FinCEN finalizes AML “beneficial ownership” identification requirements

The Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, recently finalized long-pending regulations that would require that banking organizations, securities broker-dealers, mutual funds, futures commission merchants and introducing brokers in commodities (“covered financial institutions”) identify the beneficial owners of their legal entity customers. The final rule also requires … Continue Reading

FinCEN proposes subjecting crowdfunding portals to AML requirements

On April 4, 2016, the Financial Crimes Enforcement Network (FinCEN), the US agency charged with enforcement of the US anti-money laundering (AML) laws, published a proposed rule that would subject crowdfunding portals, introduced under a recent amendment to the US federal securities laws, to the same AML requirements as securities broker-dealers. Comments should be submitted … Continue Reading

International guidance for money transmitters and their supervisors

In many countries, remittances received from abroad are essential to the recipients’ welfare. But money transmission can be a high-risk business, and even though money transmitters around the world are required to comply with a detailed framework of anti-money laundering (AML) laws and regulations, they still can be misused by criminals. Concerned about their own … Continue Reading

Customer identification requirements for prepaid card customers

Along with cash, checks, credit cards, and debit cards, prepaid cards have become a common method of payment for goods and services in the United States. Prepaid cards can be used at one merchant only, or multiple merchants, or for more general purposes such as funds transfers. They also can be used to dispense wages … Continue Reading

Proposed Department of Labor’s fiduciary rule nears finalization

The US Department of Labor (“DOL”) recently submitted its final fiduciary rule to the Office of Management and Budget (“OMB”) for clearance, one of the last steps required to implement the controversial proposal. Under the proposed rule, financial advisers of retirement accounts would owe investors a fiduciary duty and must put their clients’ best interest … Continue Reading

SEC publishes 2016 exam priorities

On January 11, 2016, the SEC published its Office of Compliance Inspections and Examinations’ (“OCIE”) 2016 exam priorities.  The exam priorities address issues involving a variety of financial institutions, including investment advisers, broker-dealers, transfer agents and clearing agencies.  OCIE selected its priorities after discussions with the SEC’s Commissioners, the SEC’s policy divisions and regional offices, … Continue Reading

Potential criminal liability for Chief Compliance Officers included in proposed NY AML regulations

Under proposed regulations issued by the New York State Department of Financial Services (“NY DFS”), state-chartered banking organizations, state-licensed branches and agencies of foreign banks, and state licensed check cashers and money transmitters, would be required to maintain “robust” transaction monitoring and filtering systems designed to better enable these financial institutions to comply with relevant … Continue Reading

Updated: FinCEN proposes anti-money laundering regulations for investment advisers

On August 25, 2015, the Financial Crimes Enforcement Network (“FinCEN”), the US anti-money laundering agency, announced proposed regulations to require Securities and Exchange Commission (“SEC”)-registered investment advisers to comply with certain regulations promulgated pursuant to the anti-money laundering (“AML”) law referred to as the Bank Secrecy Act (“BSA”). Under the proposal, these investment advisers will … Continue Reading

Business loans and “know your customer” rules

A business needing a loan oftentimes turns to its current bank for assistance. The bank may be willing to lend but before the money actually is disbursed, as part of its due diligence, it will need to go through a “know your customer” process required under the anti-money laundering laws and regulations. Businesses may get … Continue Reading

FinCEN issues first AML civil penalty against a virtual currency exchange

On May 5, 2015, the Financial Crimes Enforcement Network (FinCEN), the US federal anti-money laundering agency, announced a $700,000 civil penalty against Ripple Labs Inc. (Ripple) and its subsidiary for acting as an unregistered money services business. FinCEN and the United States Attorney’s Office for the Northern District of California, a division of the US … Continue Reading

New York issues first authorization for a company to act as a virtual currency exchange

On May 6, 2015, the Superintendent of the New York State Department of Financial Services (DFS) authorized itBit Trust Company LLC (“itBit”) to engage in the business of a limited purpose trust company and to act as a virtual currency exchange. ItBit is not your typical money services business, which is usually a nonbanking organization that … Continue Reading
LexBlog