{"id":3059177,"date":"2024-01-12T17:58:10","date_gmt":"2024-01-12T22:58:10","guid":{"rendered":"https:\/\/wordpress-1016567-4521551.cloudwaysapps.com\/plato-data\/crypto-firms-faced-nearly-6b-in-fines-in-2023-for-aml-violations\/"},"modified":"2024-01-12T17:58:10","modified_gmt":"2024-01-12T22:58:10","slug":"crypto-firms-faced-nearly-6b-in-fines-in-2023-for-aml-violations","status":"publish","type":"station","link":"https:\/\/platodata.io\/plato-data\/crypto-firms-faced-nearly-6b-in-fines-in-2023-for-aml-violations\/","title":{"rendered":"Crypto Firms Faced Nearly $6B in Fines in 2023 for AML Violations"},"content":{"rendered":"
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Crypto firms faced substantial regulatory action, collectively paying nearly $6 billion in fines primarily due to Anti-Money Laundering (AML) violations and deficiencies in customer checks last year.<\/p>\n

This marks a significant development, as crypto and fintech groups experienced higher fines for inadequate controls than the entire traditional financial system for the first time.<\/p>\n

Crypto-Related Fines Surge<\/h2>\n

The total fines of $5.8 billion in 2023, including a substantial $4.3 billion penalty<\/a> against the crypto exchange Binance, were characterized as a warning by U.S. prosecutors. The amount significantly surpassed the $835 million paid by traditional financial services groups, marking the lowest level in a decade.<\/p>\n

Dennis Kelleher, CEO of Washington-based Better Markets, an advocate for stricter regulation, commented that these figures reflect more on issues in newer finance sectors rather than an improvement in traditional banks.<\/p>\n

He highlighted that the widespread fraud and criminality in the prominent crypto industry prompted regulators and prosecutors to allocate resources toward curtailing such behavior and preventing its escalation.<\/p>\n

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Data compiled by compliance software provider Fenergo revealed that fines for money laundering and other financial crime violations increased over 30% to $6.6 billion. However, it remained below the peak of $11.3 billion in 2015.<\/p>\n

Last year saw a notable increase in fines against crypto and payment providers. Crypto firms faced 11 fines, a significant rise<\/a> from an average of less than two per year in the previous five years.<\/p>\n

David Lewis, ex-Financial Action Task Force head and current Kroll anti-money laundering chief, flags concerns over crypto firms\u2019 oversight in various jurisdictions. He emphasizes rising risks and advocates for global standards to curb<\/a> criminal exploitation of regulatory gaps.<\/p>\n

Crypto Fines Could Increase Further<\/h2>\n

Andrew Barber, a partner at Pinsent Masons, anticipates that fines against crypto and payments groups may rise further in the coming years as governments implement new regulatory regimes.<\/p>\n

Firms that previously operated without significant regulatory oversight will likely need time to adjust, and the scrutiny on their anti-money laundering (AML) controls is expected to intensify.<\/p>\n

Charles Kerrigan, a crypto specialist and partner at law firm CMS, believes that fines may decrease in the coming years because the crypto industry is now more tightly controlled<\/a> compared to its early stages.<\/p>\n

Kerrigan also points out that the global market cap of crypto is $1.8 trillion, significantly smaller than the hundreds of trillions of assets in the traditional financial system. Despite this, he acknowledges that fines may still occur as regulators aim to make a point about crypto.<\/p>\n

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