Dr. Carlos Ruiz Viquez’s Post

Digital Asset Compliance: The Silent Enabler of Financial Crimes As digital assets grow, so do risks. Weak compliance programs in crypto have become gateways for money laundering, fraud, and sanctions evasion. Where compliance fails: Delayed or weak KYC onboarding No real-time transaction monitoring Ignored SARs (Suspicious Activity Reports) Poor sanctions screening & OTC misuse “Growth-first” culture over governance What it leads to: Billions laundering through mixers, DeFi bridges, and darknet markets, fueling scams, hacks, and state-backed cybercrime. Case in Point – Binance (2023): US DOJ charged Binance for willful AML & sanctions failures → $4.3 B settlement, CEO guilty plea, and mandatory compliance overhaul. Lesson: Even giants fall when compliance is treated as optional. Top real-world failures: 1. Binance – $4.3 B AML violations 2. FTX – $8 B customer fund misappropriation 3. BitMEX – $100 M AML fine 4. OneCoin – $4 B global Ponzi 5. Bybit Hack (2025) – $1.5 B theft Crypto + Dark Web Nexus: Bitcoin powered early darknet markets like Silk Road, while mixers such as Tornado Cash became laundering pipelines for Lazarus-linked cyberheists. Compliance Takeaways: Full KYC & KYT integration Strong SAR culture Continuous sanctions & wallet screening Governance + independent AML audits Board-level accountability Bottom Line: Crypto isn’t the problem; weak compliance is. Digital asset platforms must act like banks, not bystanders.

🧠 Crypto Laundering & AI: A New Era of Digital Asset Intelligence As crypto adoption accelerates, so does the sophistication of financial crime. Lucinity’s recent article on crypto-driven laundering and AI agents offers a compelling look at how artificial intelligence is transforming digital asset investigations—from reactive detection to proactive intelligence. Traditional AML systems struggle with the speed, anonymity, and decentralization of crypto transactions. Criminals exploit mixers, DEXs, and cross-chain bridges to fragment audit trails and obscure fund origins. But AI agents—especially those designed with explainability and human-in-the-loop oversight—can detect subtle patterns, adapt to emerging typologies, and surface actionable insights for compliance teams. 🔍 Key Capabilities of AI Agents in Crypto AML - Entity resolution: Linking pseudonymous wallets to behavioural profiles - Typology mapping: Identifying laundering patterns across smart contracts and DeFi protocols - Alert prioritization: Reducing noise and surfacing high-risk cases - Explainable logic: Providing transparent rationale for flagged activity Lucinity emphasizes that AI isn’t just about automation—it’s about augmentation. The most effective systems combine machine intelligence with human expertise, enabling investigators to navigate blockchain complexity with clarity and speed. 🛡️ Why This Matters for Fintech & Compliance Leaders Crypto laundering is no longer fringe—it’s systemic. Regulators are demanding more transparency and auditability in AI-driven compliance. Firms that invest in explainable, adaptive AI will be better equipped to manage risk and scale responsibly. The future of AML isn’t just digital—it’s intelligent. And in the world of crypto, intelligence means seeing what others miss. Read the full article here:- https://lnkd.in/ehcQQU2v #CryptoCompliance #AML #AIinCompliance #Lucinity #DigitalAssets #BlockchainRisk #SmartContractLaundering #TypologyFramework #RegTech #FinancialCrime #LinkedInCrypto #ComplianceLeadership #ExplainableAI #CryptoForensics #DeFiRisk

Why crypto-asset flow tracing is the new unresolved “sandbox” in AML ? Today I’m diving into a challenge that many institutions are quietly facing, and which savvy compliance teams are tackling head-on: tracing crypto-asset flows in the evolving digital-asset ecosystem. The work my team at Huron does at advising firms on AML/KYC/Sanctions programs, I’ve observed three converging forces making this harder and more urgent than ever: a) Regulatory pressure continues to ratchet up around digital assets and wallet providers. As one recent analysis puts it, “stronger crypto AML regulations … all major crypto platforms will likely be required to implement stricter KYC/AML controls, including transaction monitoring” by end of 2025. b) Cross-chain and tokenised-asset complexity is multiplying the attack surface. What used to be “send crypto, watch wallet” is now “multi-chain, multi-token, intermediary smart contracts” making lineage much harder to establish. c) Enforcement regimes are adapting not just for banks, but for crypto service providers, wallets, and tokenised-asset platforms. In other words: if you’re not already looking at your crypto flows the way you look at your wire-flows and correspondent accounts, you’re leaving a gap. Here’s what I’m telling clients to focus on now: a) Map out your current coverage of crypto wallets, token flows, and on-chain vs off-chain conversion points. b) Apply a risk-based lens: which crypto rails / tokens / corridors feed your business? Which feed potential sanction evasion, fraud, layering? c) Bring in specialist analytics / on-chain forensic tools to link transactional patterns to wallet behaviour, not just simple thresholds. d) Integrate your crypto risk-views with your sanctions-screening and beneficial ownership work. The silos are collapsing. e) Make sure your SAR/STR processes and case workflow reflect crypto-specific red flags and triage not just “wire transaction above threshold”. In short: the digital-asset ecosystem is no longer optional in your AML strategy it’s integral. Firms that treat it as an add-on will get found out (and regulators are watching). If your team is wrestling with how to implement robust crypto-asset monitoring, align it with sanctions/KYC, or optimise resources while keeping false positives manageable let’s chat. I help firms build the practical frameworks and tools that move beyond theory into sustainable operations. Alan Morley Mike Willhelm Rob Loh Brad Morgan Michael DeGuzman Tyler Langenkamp Matthew Thomas, CFCS Susan White, CAMS

No. 2️⃣3️⃣ - Virtual Asset Snapshot: Qatar - What are the regulatory developments, current landscape and key money laundering vulnerabilities related to virtual assets and VASPs? 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸 🏛️ Qatar adopts a cautious, “tokenisation-first” approach. The Qatar Financial Centre (QFC) issued a Digital Assets Framework (1 Sept 2024) establishing licences for TSPs and a legal base for tokenising real-world assets, while explicitly excluding cryptocurrencies and stablecoins. Nationally, Law No. 20 of 2019 remains the core AML law; digital-asset activity is subject to AML rules only if it fits existing definitions or QFC permissions. 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗢𝘃𝗲𝗿𝘀𝗶𝗴𝗵𝘁 🔎 Supervision is split: QFCRA/QFCA oversee entities in the QFC, while the Qatar Central Bank (QCB) supervises the wider financial sector. As cryptocurrencies are “excluded tokens” and the QCB maintains restrictions (Circular No. 6/2018 and updates), there are no licensed VASPs operating on-shore, regulated digital-asset activity is tightly confined to the QFC. 𝗟𝗶𝗰𝗲𝗻𝘀𝗶𝗻𝗴 & 𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 🧾 The QFC framework licenses Token Service Providers for custody, issuance, validation, and tokenisation of permitted tokens. Licensed entities must meet AML/CFT obligations such as KYC/UBO checks and STR reporting to the QFIU. As a national VASP regime for crypto isn’t yet in force, the FATF Travel Rule isn’t broadly implemented; QFC-licensed TSPs, however, follow AML standards aligned with international norms. 𝗠𝗟/𝗖𝗙𝗧 𝗥𝗶𝘀𝗸𝘀 ⚠️ Virtual assets can enable cross-border transfers and anonymity (mixers, privacy coins) and combine with informal remittances or trade-based flows. The 2023 FATF Mutual Evaluation found Qatar’s AML system robust but noted gaps in turning QFIU intelligence into prosecutions - a risk that will grow if digital-asset volumes expand without matching investigative and forensic capacity. 𝗧𝗮𝘅𝗮𝘁𝗶𝗼𝗻 𝗨𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝘁𝘆 💸 Official crypto tax guidance is limited. With no definitive domestic regime, treatment and reporting of offshore or non-QFC crypto activity remain unclear, creating compliance blindspots such as undeclared gains or potential tax-evasion risks. 𝗙𝘂𝘁𝘂𝗿𝗲 𝗢𝘂𝘁𝗹𝗼𝗼𝗸 🔭 A dual-track path is likely: (a) regulated tokenisation within QFC, allowing tokenised real-world assets under strict AML oversight; and (b) continued crypto restrictions outside the QFC until supervisory and forensic capacity mature. Priorities include Travel-Rule readiness, clear tax rules, and stronger FIU-to-prosecution pipelines - in line with FATF guidance and Qatar’s MER findings. Access full reporting and scoring on all 245 jurisdictions via subscription. 👉 sales@knowyourcountry.com

💡 Azerbaijan Quietly Closed a Major AML Blind Spot One of the most interesting parts of Azerbaijan’s 2023 AML overhaul isn’t about banks or beneficial ownership registers — it’s about electronic transfers and one-off transactions. Under Article 1.1.23 of the new Law “On Combating Legalization of Criminally Obtained Property and Financing of Terrorism”, an electronic transfer is defined very broadly — covering both cross-border and domestic transactions, whether or not a payment account is opened, and even cases where the sender and the recipient are the same person. But here’s the subtle twist: Transfers via payment cards for goods and services, or internal settlements between financial institutions, are not considered “electronic transfers” under AML scope. That mirrors FATF Recommendation 16, which excludes card-based payments from “wire transfer” rules, yet keeps them under broader monitoring. Then comes Article 4.2.3, which quietly changes the compliance landscape: Before any one-off electronic transfer or one-off virtual-asset transaction, obliged entities must apply full customer due diligence (CDD), following the Central Bank’s rules. This means even single, account-free transactions — once considered “too small” or “outside AML scope” — now trigger CDD. In other words, the “unregulated corners” of e-money and crypto are no longer invisible. 🌍 How Azerbaijan Compares Azerbaijan 🇦🇿 Definition of “electronic transfer” fully aligned with FATF (card payments excluded) Full CDD required even for one-off transfers and crypto operations Explicit AML coverage of virtual assets European Union 🇪🇺 Same FATF-aligned definition CDD required only for one-off transfers above €1,000 Virtual assets included since AMLD V Georgia / Turkey 🌍 Similar definitions but more limited implementation Risk-based CDD approach — not automatic for small transactions Partial or emerging coverage of virtual assets ⚙️ Why It Matters For compliance teams, this closes a long-standing gap. Anonymous, one-off electronic or crypto transfers — often used to move small sums below reporting thresholds — are now clearly within AML reach. Azerbaijan’s AML regime may still be young, but in this area it’s stricter than parts of the EU, aligning closely with FATF’s intent rather than its minimum thresholds. 💬 What’s your take? Do you think requiring CDD on every single electronic or crypto transfer is an over-correction, or the right step toward stronger financial integrity? #AML #Compliance #Azerbaijan #FATF #VirtualAssets #FinancialCrime #CDD #RiskManagement

Synthetic identities. Stablecoin laundering. Regulatory asymmetry. This new Toralya insight reveals how deepfake KYC and cross-jurisdictional gaps are redefining the next frontier of AML and financial forensics.

The Bank Secrecy Act was designed for paper money in 1970. Digital criminals aren't using paper. The gap is enormous. Coinbase just told the Treasury Department something we all know. Current AML rules are broken. They're asking for something revolutionary: 🤖 AI-powered compliance tools 📊 Blockchain analytics for real detection 🔐 Zero-knowledge proofs for privacy 🆔 Decentralized identity verification Here's the reality check. Financial institutions file 25 million reports annually to FinCEN. Most document lawful activity that gets ignored. Meanwhile, compliance costs keep rising. Smaller providers get squeezed out. Customers pay higher fees. The privacy issue is huge too. Americans complete redundant KYC checks for every account. This creates data honeypots that criminals love to target. Coinbase's Chief Legal Officer Paul Grewal nailed it: "When bad guys innovate in financial crime, good guys need innovation to keep pace." The U.S. Secret Service already uses these digital tools for major criminal seizures. The tech works. We just need regulators to catch up. Regulatory sandboxes could let firms test new compliance approaches safely. Smart contracts could automate suspicious activity detection. The choice is clear. Stick with 1970s rules for 2025 crimes. Or embrace technology that actually works. What do you think? Should regulators prioritize innovation or stick with traditional enforcement? #AML #Blockchain #FinTech 𝗦𝗼𝘂𝗿𝗰𝗲꞉ https://lnkd.in/gkjak-i2

The Importance of AML (Anti-Money Laundering) Compliance in a Digital World 🌐💸 In today's rapidly evolving digital landscape, Anti-Money Laundering (AML) compliance is no longer just a regulatory requirement. It's a critical pillar in safeguarding financial systems against fraud, money laundering, and other illicit activities. 🚨 With the rise of digital banking, cryptocurrencies, and online payments, criminals are becoming more sophisticated, using tech to hide their tracks. But so are the tools we use to fight financial crime! 💡 🔑 Key Points to Remember: Global Regulatory Pressure: Governments are tightening AML regulations, and the cost of non-compliance is steep including hefty fines, reputational damage, and even legal action. 💼 The Crypto Challenge: Cryptocurrencies bring both innovation and new risks. As digital assets grow, so does the need for robust AML frameworks. 🔒 AI & Automation: The volume of transactions today makes manual checks impractical. Automation and AI are transforming AML efforts, detecting suspicious activities faster and more accurately than ever before. 🤖 Brand Reputation: The stakes are higher than ever. A single breach can damage consumer trust. Implementing strong AML practices shows your commitment to transparency and ethical business. 🌍 As digital transformation continues to reshape financial services, AML compliance must evolve to meet new challenges. It's not just about staying compliant; it’s about protecting your business, your customers, and the integrity of the financial system. 💡 #AML #Compliance #FinancialCrime #DigitalTransformation #Cryptocurrency #FinTech #RegTech #AI #MachineLearning #FinancialServices

🚨€21.3 million fine for Coinbase: Why AML control failures are now a regulatory red line The Central Bank of Ireland (CBI) has fined Coinbase Europe €21.3 million for serious breaches in anti-money-laundering (AML) and counter-terrorist-financing (CTF) requirements. This enforcement marks one of the largest penalties ever imposed by the CBI and sends a clear message to the global crypto and fintech industry: AML compliance failures are no longer tolerated. 📍What happened Coinbase failed to monitor more than 30 million transactions, roughly 31 percent of its total volume, worth over €176 billion. The issue stemmed from coding errors in five out of twenty-one monitoring scenarios, leaving significant transaction flows unchecked. A later review found around 185,000 transactions that required investigation, with approximately €13 million identified as potentially suspicious. 📍Why it matters This case highlights how weaknesses in transaction-monitoring systems can expose firms to severe regulatory, reputational, and operational risk. It also underlines that regulators now view crypto-asset service providers through the same supervisory lens as traditional financial institutions. Failures once viewed as technical oversights are now seen as governance and control breakdowns and enforcement will follow. 📍What firms should take from this For crypto, payments, and fintech firms, this is a reminder to: • Review transaction-monitoring systems for logic or coding errors • Regularly test AML/CTF scenario coverage and thresholds • Ensure governance frameworks provide clear board-level accountability • Act quickly when issues are identified — remediation delays amplify risk At Lysis Group we work with financial institutions, fintechs, and crypto-asset firms to strengthen AML and financial crime controls, enhance transaction-monitoring frameworks, and prepare for regulatory scrutiny. Our teams support firms through system reviews, health checks, and remediation projects ensuring compliance frameworks are both effective and defensible. As enforcement activity increases across Europe, firms that act now to test and strengthen their AML systems will be best positioned to maintain trust and resilience. 🌐 lysisgroup.com 📧 info@lysisgroup.com #AML #CTF #Crypto #Fintech #Payments #Compliance #RegTech #TransactionMonitoring #RiskManagement #LysisGroup #CentralBankofIreland #Coinbase

🤷🏾♂️❓ Should You Take Traditional AML Courses to Get Crypto Compliance Jobs ❓🤷🏾♂️ I have been following Alexandra Tarabour, MBA, CFE crypto investigation journey and I noticed she mentioned pursuing traditional AML certifications like ACAMS or equivalent to get traditional compliance knowledge to pursue blockchain investigation jobs. My Initial Thoughts --- 🏈🏈 Punt Traditional AML certifications altogether, but here are some more of my nuanced thoughts ⭐️ Blockchain Investigations Certifications like Chainalysis CRC allow you to very scenario based and practical exercises that gives you hand on experience in actually conducting blockchain investigations, while the traditional AML courses although great, may be too "broad" and not give you the theory based knowledge that is important to crypto investigations ⚠️ ACAMS has a CAFCA course that was designed by FINTRAIL, now if my memory serves me CAFCA was the certification birthed from 2 other courses that ACAMS offered and that I taught. AML for fintechs and Fintechs as your Customer. These courses are actually more valuable in the crypto space because they talk alot about risk and geography, product line and delivery methods, which I feel are much more aligned to the AML concerns you will run into at a crypto exchange 📌 Melanie Lefebvre is an industry leading investigator who came from absolutely no traditional experience or certifications ( I believe) and she is the poster women for why I think you just focus on crypto investigations, but she does raise a good point that some of the best professionals she worked with came from traditinal compliance vocations. And I agree if you are transitioning skills it makes alot of sense, but I wouldn't go educate from scratch to get those same skills p.s. Shoutout Alex Pelin for hooking me up with a fresh The Financial Club hat. It was a great way to cap (see what I did there) off our Money20/20 experience p.s.s. If any other company has cool gear or gadgets, they want to be viewed millions of people a year. I'm all for it 🤷🏾♂️😅 I'm curious what my crypto compliance / tradiitonal AML folks think. Focus on Crypto Courses and punt Traditional Certifications ❓ Ash Aiyar ❓ Rick Harmsen ❓ Amber D. Scott ❓ Joshua Deeks, ❓ Charlene Cieslik, ❓ Mohit Dysell ❓ Christina Rea-Baxter, ❓ Emily Mochama, ❓ Adebayo Tiamiyu 🎯Anything I Missed 💭⬇️