The United States government has stood by its evidence presented against alleged OneCoin money launderer and former attorney Mark Scott. In a memorandum filed on March 24, the government responded to Scott’s appeal that the prosecution provided insufficient evidence that the funds he handled were derived from illicit activities during November’s proceedings — where a jury handed the defendant a guilty verdict. The former attorney was found to have personally profited $50 million for laundering $400 million in OneCoin’s profits. Scott filed his motion to dismiss the case with the court last month. U.S. government rejects Scott’s appeal The government …

The Financial Transactions and Reports Analysis Center of Canada (FINTRAC) has announced it will soon implement new anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. The laws including updated guidelines for virtual currencies. In a departmental report published on March 10, FINTRAC emphasizes that the establishment of “an enhanced AML/[CTF] regime” for businesses operating with cryptocurrencies is “a major priority in the near term.” FINTRAC expands regulatory mandate regarding offshore crypto companies In the report, FINTRAC emphasizes the challenges arising from business and consumer adoption of new technologies such as cryptocurrency — adding that while most of the changes arising …

Some countries have been late to the party when it comes to recognizing and regulating digital assets. The first time that Singapore’s central bank issued a framework for the regulation of payment-related activities was on Jan. 28 with the Payment Services Act. However, the Monetary Authority of Singapore (MAS) still saw the potential risks that digital assets could pose to the economy, such as money laundering and financing terrorism. As part of the effort to address this, the MAS issued a notice on Dec. 5 regarding the ”Prevention of Money Laundering and Countering the Financing of Terrorism”. The notice detailed …

Two Canadian nationals have been sentenced to two years in a United States federal prison for stealing 23.2 Bitcoin (BTC) through a scam on Twitter in 2017. According to the U.S. Department of Justice, on March 17, 23-year-old Karanjit Khatar and 24-year-olds Jagroop Khatkar were formally sentenced to 24 months in prison and three years supervised release for money laundering and conspiracy to commit wire fraud. Scammers impersonate HitBTC support staff on Twitter Beginning in October 2017, the British Columbia-residents were found to have impersonated customer service representatives from the Hong Kong-based cryptocurrency exchange HitBTC. Acting under the handle “@HitBTCAssist,” …

Blockchain forensics firm CipherTrace has published a detailed analysis of how two Chinese nationals, linked to North Korea, laundered tens of millions of dollars worth of stolen cryptocurrency. The pair are believed to be associated with the shadowy Lazarus Group, which was behind the Sony breach in 2014, the WannaCry ransomware epidemic in 2017, and a $7 million attack on Bithumb (also in 2017). They used ‘peel chains’ to hide the size of deposits to avoid unwanted attention, and doctored photographs to fool KYC verification processes, among other tricks. On March 2, the United States Treasury’s Office of Foreign Assets …

A Washington state resident has been charged with money laundering after selling Bitcoin for $140,000 in cash to undercover agents. Bothell’s Kenneth Warren Rhule, 26, met with agents from Homeland Security Investigations on numerous occasions between April to December 2018, often in Seattle-area Starbucks cafes. According to the unsealed complaint Rhule — who traded on localbitcoins.com under the name Gimacut9 — allegedly closed at least seven deals with agents "posing as criminals" who wanted to buy untraceable Bitcoin with the proceeds of their operations. They told Rhule they were bringing Ukranian women to the U.S. for the purposes of prostitution. …

A new report on the PlusToken Ponzi scheme shows regulated exchanges are being used to dump coins, despite stringent Know Your Customer (KYC) identify verification rules. Investigative company OXT Research has released a second edition of their in-depth blockchain analysis on the PlusToken scam. The report explained PlusToken funds generally moved from unmixed allotments and locations, to mixers. After mixers, the funds saw consolidation, and then finally distribution. OXT’s report said: “Approximately 80% of coins entering mixing have been distributed while up to 33,872 BTC remain in the mixer and 3,853 BTC are in the distribution process, resulting in a …

The volume of cryptocurrency flows on darknet markets — which are involved in illegal drug and arms trafficking, remittance and transfer of illicit funds — have doubled for the first time in four years, a new report says. Accordingly, Russia has been updating its bribery and Anti-Money Laundering laws regarding cryptocurrencies to aid its burgeoning digital economy. Related: Presumed Guilty: Financial Watchdogs See Crypto as Illicit by Default Cryptocurrency bribery Bitcoin (BTC) hit the headlines in Russia after it emerged that the Russian Federal Security Service, or FSB — successor agency to the Soviet KGB — had tried to extract …

Tokyo police arrested two men in connection to the Coincheck hack on March 11. The men are accused of purchasing stolen NEM (XEM) through a dark web market, in violation of a law designed to tackle organized crime. As reported by Japan Times on March 11, Tokyo’s Metropolitan Police Department arrested a doctor from Hokkaido and a company executive from the Osaka Prefecture. According to the police, the suspects knew the origin of the funds. They reportedly purchased the XEM at a sizeable discount in February and March 2018 from a dark web website. The suspects were allegedly apprehended through …

To combat the alleged risks associated with crypto assets and their networks, Her Majesty’s Treasury, the United Kingdom’s finance and economics department, has added additional measures. The new Money Laundering Regulations, or MLRs position the U.K.’s Financial Conduct Authority (FCA) as the Anti-Money Laundering (AML) overseer for certain crypto objectives, Director of Retail and Regulatory Investigations, Therese Chambers said in a March 6 speech. These MLRs go “beyond the 5MLD to include a broader set of activities, such as Initial Coin Offerings (ICOs), as recommended by FATF last year,” Chamber’s said. The EU already has strict AML The European Union, …

Reginald Fowler has pleaded not guilty to a new charge of wire fraud during a March 6 hearing at the United States District Court for the Southern District of New York. On Feb. 20, the U.S. government filed a superseding indictment against Fowler, adding wire fraud to existing charges of bank fraud, illegal money transfer and conspiracy stemming from Crypto Capital alleged shadow banking practices. James McGovern, Fowler’s attorney, criticized the fresh indictment, asserting that he has “no idea what [Fowler has] been charged with,” such as when and how the alleged wire fraud took place. “I've never really seen …

Anti-money laundering regulations on cryptocurrency and blockchain transactions may be having a positive outcome in East Asia. According to an article released by the Japanese newspaper Nikkei on Mar. 3, the National Police Agency of Japan brought criminal charges in 537 cases against financial institutions involving money laundering or other illegal transactions. These cases come from a total of 440,492 such suspicious transactions reported to the police in 2019. Data from 300,786 transactions out of the 440,492 were determined to have grounds for investigations. Among all companies that were reported, depository institutions such as banks accounted for 80% of all …