One key takeaway from the federal government’s shutdown of Liberty Reserve: virtual currency businesses aren’t the only ones who should be worrying about money laundering. From attorneys Kaitlyn Ferguson and Lauren Resnick at BakerHostetler:
“The proliferation of money laundering through cyberspace is an increasing threat. Criminal organizations no longer have to rely on the physical transfer of suitcases of cash across borders to ‘clean’ the proceeds of their unlawful activities. As these organizations become more sophisticated in finding ways to bank their criminally derived proceeds outside of the regulated financial system, many crimes will become increasingly difficult to detect.
Companies utilizing technology to conduct their business activities, whether they are financial institutions, funds transfer processors or users of these services, must develop compliance controls to ensure they do not become vehicles for money laundering and are not doing business with such organizations. Facilitating money laundering has harsh consequences, and even the unwitting use of a money launderer such as Liberty Reserve can result in the freezing of a legitimate company’s assets or blockage from the U.S. financial system. Today, more than 74 countries have anti-money laundering statutes, and companies engaged in cross-border activity must ensure that their policies comply not only with the policies of the United States but also with the laws and regulations of other countries where they do business. Companies are advised to vet vendors and other service providers to identify suspicious activity in order to avoid criminal exposure for transaction activity that violates federal law and protect against the commercial consequences of doing business with an entity that becomes the target of government prosecution and forfeiture.”
Read the full update, Federal Government Expands AML Cybercrime Enforcement – BakerHostetler»