By Opinion 
45m in the past
Sumit Kumar Sharma, Enterprise Architect at In2IT.
Cash laundering is a worldwide drawback that may solely worsen as know-how developments make it more and more simpler and quicker to maneuver cash anyplace on this planet. Consequently, criminals have began utilizing cryptocurrency as a simple strategy to launder “soiled” cash.
In keeping with the UN, the estimated amount of cash laundered globally in a single 12 months is between 2% and 5% of the worldwide Gross Home Product (GDP), which is between $800 billion (practically R11.8 trillion) and $2 trillion.
One of the vital high-profile instances of cash laundering in South Africa’s current historical past concerned the notorious Gupta brothers, who had been alleged to have laundered about R500m by conservative estimates.
Nevertheless, the Monetary Intelligence Centre Act (Fica), which is South Africa’s main anti-money laundering and counter-terrorism financing laws, has been in pressure since 2003, and may to some extent have prevented this.
Since then, the nation’s regulatory compliance and authorized frameworks round cash laundering have been strengthened and South Africa complies with worldwide regulatory our bodies such because the Worldwide Financial Fund (IMF) and the Monetary Motion Activity Drive (FATF).
The South African Reserve Financial institution (SARB) lately widened its supervision scope to incorporate insurance coverage entities. That is mandated by Fica and can assist our battle in opposition to AML/CFT. It looks like we’re making the proper calls and placing the proper frameworks into place to fight this scourge.
It’s encouraging to see that native banks and monetary establishments are going through stiffer fines for non-compliance with rules set out within the Safety of Private Data (PoPI) Act, in addition to the necessities of Know Your Consumer (KYC) and AntiMoney Laundering (AML) legal guidelines.
AML is a set of insurance policies, procedures and applied sciences that forestall cash laundering by forcing monetary establishments to observe their purchasers and requires these organisations to report any monetary crime they detect to related authorities.
There are three phases to cash laundering: a) Placement, which includes placing illicit cash into the system by belongings, property and even cryptocurrency; b) Layering, which is the act of separating one’s identification from this cash, as an illustration by a collection of shell corporations; and c) Integration, which includes transferring the laundered cash into the financial system primarily by the banking system.
Cybercriminals are more and more utilizing cryptocurrencies to launder cash, particularly as it’s a very simple resolution for layering – detaching themselves from “soiled” cash. In lots of nations, together with South Africa, cryptocurrency shouldn’t be a authorized tender and doesn’t have the backing of central banks.
SARB lately printed a place paper that gives a a lot clearer view of its place concerning regulating the cryptocurrencies.
Nevertheless, this has opened an enormous marketplace for unregulated cryptocurrency and cybercrooks are exploiting the openness of the platform and the know-how behind it to cover their identities and transfer illicit cash seamlessly throughout worldwide borders.
Our cryptocurrency rules have lot of scope to enhance and cash laundered right here might have a tragic influence elsewhere on this planet. We too must take it extra significantly.
* The views expressed right here will not be essentially these of Unbiased Media.
