Crypto News: Unregistered Crypto Firms Fuel Million-Dollar Laundering

 In Canada, unregistered crypto companies are facilitating million-dollar money laundering through end-around of the finance laws, and transactions are not properly vetted through ID checks.

Unregistered cryptocurrency companies in Canada are turning into significant vehicles for laundering millions of dollars due to the loopholes in regulation and enforcement.

An investigation by CBC News and Radio-Canada, organized in collaboration with Toronto Star and La Presse, found that criminals so easily use such services to transform cryptocurrency into untraceable sums of money without verifying their identities that the anti-money laundering system has critical vulnerabilities in Canada.

Rogue Operators Enable Anonymous Cash Transfers

In Toronto, a registered money transfer company contravened the law by handing in $1,900 US in cash without any form of identification after receiving a transfer of cryptocurrency to an unregistered exchange based in Ukraine. 

This trade was in violation of Canadian laws that mandate recording of recipient details on transactions of over one thousand US, though it was carried out on the instruction of a rogue manager, and this represents poor control even among the registered parties.

International services called by journalists promised to send up to 1 million CAD in cash to destinations in Montreal in exchange for cryptocurrency transfers, with no ID checks. 

These operations have been able to facilitate the anonymization of illegal money in different provinces since they are yet to be addressed by the financial intelligence unit FINTRAC in Canada.

Related Reading: Bitcoin Money Laundering Penalties Surge, Brokers Must Comply in Brazil

Regulatory Lapses and Implementation Problems.

Unregistered crypto companies avoid registration by FINTRAC, which enables millions of dirty dollars to move unfettered across Canadian cities, from Halifax to Vancouver. 

The investigative journalism exposed over 20 unregistered crypto-to-cash services in the country. 

Critics have cautioned that these services establish a Wild West environment in the field of money laundering, as criminals are able to transfer money without any form of identification, and this negates the purpose of anti-money laundering laws.

The Canadian Money Services Business Association recognizes the resource constraints that FINTRAC faced in effectively policing its registered money services businesses, which currently stand at 2,600 and above. 

Because of this, unregulated platforms take advantage of such enforcement loopholes, driving the amount of illegal activity to shocking proportions.

Recently, Canada has made several moves by its financial crime watchdog against registered crypto firms committing money laundering-related offenses, such as a record fine of $177 million levied against Cryptomus due to not reporting suspicious transactions involved in serious criminal affairs.

This indicates the seriousness of regulation but also points to the size of compliance problems in the crypto industry. 

Related Reading: South Korean Actress Skips Jail After Laundering 4.34 billion Won In Crypto

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