According to a survey conducted by First AML, 41% of companies have identified instances of money laundering related to cryptocurrencies. Around 53% of respondents believe that current business practices address the threat only partially.
Moreover, First AML found that 78% of business leaders think their company’s anti-money laundering compliance can be improved, indicating a need for businesses to prioritise their AML processes.
“The emergence of cryptocurrency-related money laundering presents significant challenges for businesses attempting to combat financial crime”, said Bion Behdin, chief revenue officer at First AML. “It is clear that current practices only partially address this threat and that keeping pace with evolving money laundering techniques presents a significant challenge. Businesses need to find effective ways of staying up to date with regulatory guidance and continue to develop new processes to stay compliant.”
Fifty-one per cent of companies have been fined for AML non-compliance, with a large majority (85%) reporting that the penalties impacted their operations negatively.
Banks have recently come under fire for AML non-compliance. In December 2022, the Financial Conduct Authority fined Santander UK $107m for lax AML controls, which affected the accounting oversight of over 560,000 business customers.
For this reason, some companies have started to raise funds to help with the burden. In April, Fourthline, an AI-powered business giving banks and financial institutions (FIs) access to a range of in-house tech products, raised $54.3m to fund compliance for European-regulated FIs.
In January, Hawk AI raised $17m in a Series B round to provide for its geographic expansion and speed up AML product development.