Saying you have BSA/AML controls in place is no longer good enough, as the DoJ once again highlight, in their prosecution of Paxful. *Old World:* saying you have AML policies in place *New World:* being able to evidence you have AML policies in place *Old World:* saying you perform KYC checks *New World:* proving you have effective KYC checks for 100% of customers You now need the knowledge and evidence to walk into an exam and say you don't have a breach or a failure. Just like our customers do! “Cable gives me the confidence to walk into any regulator and say I know I don't have a breach.” (Steven Eisenhauer, Chief Risk & Compliance Officer, Ramp) Thanks Jason C. Honeycutt, Attorney, CAMS, CAMS-Audit for sharing this!
Another AML prosecution by DoJ… Paxful Inc. Co-Founder Pleads Guilty to Conspiracy to Fail to Maintain Effective Anti-Money Laundering Program -Paxful, an online peer-to-peer virtual currency platform and money transmitting business -customers negotiated for and traded virtual currency for a variety of other items, including fiat currency, pre-paid cards, and gift cards -allowed customers to open accounts and trade on Paxful without gathering sufficient know-your-customer (KYC) information -marketed Paxful as a platform that did not require KYC -presented fake AML policies to third parties that he knew were not, in fact, implemented or enforced at Paxful -failed to file a single suspicious activity report, despite knowing that Paxful users were perpetrating suspicious and criminal activity. https://lnkd.in/gtGqKfAB.
Yes, proof of effective AML controls is the standard. Proof is not a conversation, proof is something that will withstand a review by a federal prosecutor, a judge, and a jury. So it must be easily understood, well defined (like a dictionary or encyclopedia), and easy to grab and produce before the end of the business day.
Compliance & Risk Management Expert | Driving Results with Strategic Vision | Navigating Regulatory Landscapes for Business Success
3wThe Financial Conduct Authority in the UK produces a Financial Crime Guide (commonly known as the FCG) which tells you exactly what the regulator expects from your entire anti-Financial Crime Program. It is currently under consultation for updates but is still the go to guide for best practices on documenting your compliance activities. Combined with the The Joint Money Laundering Steering Group Limited guide your record keeping requirements are more or less completely outlined.