BY PAUL O’DONOGHUE, Senior Correspondent
With Donald Trump winning back the White House, what now for cryptocurrencies?
In an effort to clamp down on financial crime, the U.S. has recently been moving towards tighter oversight of digital assets.
Last year FinCEN, the AML unit of the U.S. Treasury, proposed a rule to introduce tighter checks on cryptocurrency flows. Since then, U.S. officials have repeatedly warned of the money laundering risk posed by cryptocurrencies.
But Bitcoin hit a record high yesterday, as many crypto enthusiasts hope that Trump’s ascension to America’s highest office will mark a change in attitudes towards digital assets.
Crypto companies spent $119 million this year in an attempt to influence federal elections – and it seems that now, all of their Christmases have come at once. Trump has repeatedly lavished praise upon Bitcoin, and the hope is that he will ease oversight of cryptocurrencies.
For example, Trump has vowed to oust Gary Gensler, the chair of the Securities and Exchange Commission (SEC), who has brought many lawsuits against crypto projects for allegedly violating securities laws.
But while this could open the door to more cryptocurrency innovation, analysts also fear it could lead to the spreading of more scams and leave consumers more vulnerable to the likes of cryptocurrency exchange FTX, which was at the center of an $8 billion fraud case.
AI ADAPTATION: The slow adaptation of AI could leave Asian businesses vulnerable to financial crime, a new report has said.
The study from SymphonyAI I and Regulation Asia found that only 15% of Asian financial institutions report “advanced” AI integration in their compliance functions.
It also found that over 50% of APAC financial institutions are not using AI for AML, despite recognising the technology’s potential.
Money laundering risk events in Southeast Asia rose 64% from 2018 to 2023, according to Moody’s
QUANTUM COMPUTING: Despite still being largely theoretical, quantum computers have become a source of hope for many of the world’s leading financial crime fighters.
The technology is a different type of computing, which allows machines to solve complex problems much faster than traditional computers.
While many experts have said quantum computers could be used to combat money laundering, regulators are wary that they could also be used by financial criminals .
This is a key reason why Italy and Singapore carried out a test this week to protect sensitive data from future cyber threats posed by quantum computers.
Due to their theoretical much better problem-solving abilities, it is thought that quantum computers could one day break current data encryption techniques.
This could give criminals access to confidential data, making financial crimes such as scams much easier to carry out.
Banque de France (BdF) and the Monetary Authority of Singapore are developing technologies which aim to make communication systems “quantum-proof.”
The technology has been used to encrypt and digitally sign emails and could become a powerful anti-financial crime tool.
AI IN AML
WORKFUSION: Congratulations to David Caruso , who has just been named as Vice President of Financial Crime Compliance at WorkFusion .
The firm is one of the most exciting in all of AML and tech, producing an AI-driven software which catches unusual financial transactions.
WorkFusion has raised almost $400 million from various backers and said Caruso will play a crucial role in helping the business navigate regulations in the likes of the U.S. market.
Caruso is an industry veteran with over 25 years of experience.
A former Special Agent with the U.S. Secret Service, he has built AML and sanctions compliance programs at organizations including JP Morgan and HSBC.
VERIFICATION: Finally, identity verification firm ID-Pal has signed a deal with Ireland’s Department of Justice to streamline the country’s online visa renewal process.
The department will use ID-Pal’s AI-driven technology to verify identities instantly, aligning with AML and data protection regulations.
ID-Pal said its system can check over 7,000 types of identity documents and access 200 global sources for verified address data.
Founded by CEO Colum Lyons in 2016, the company offers real-time identity checks, including document verification, facial recognition, and address confirmation.
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