CROWDFUNDING AND MONEY LAUNDERING

On 27 February, a report published by ACFCS by a Scotiabank AML analyst, and well worth a read, tackles financial crime compliance and crowdfunding.  The funding platforms in the nascent but burgeoning sector, in some cases it says, can be abused by money launderers, fraudsters and even terror groups, and in many jurisdictions it is not subject to formal AML rules – seemingly leaving the duty to craft programmes to counter criminals as optional.  The report looks at the varieties of crowdfunding and potential red flags.  It suggests that equity crowdfunding might be the “smart choice” for launderers, and explains how this might be done, in ways that sometimes resembles the equally little-known “transaction laundering”.  The report considers when crowdfunding is, in fact, a pyramid scheme.  Finally, it looks at the potential use of crowdfunding by terrorists.

https://www.acfcs.org/acfcs-special-contributor-report-crowdfunding-an-unorthodox-way-of-money-laundering-definitelymaybe/

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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