Emerging Financial Crime Risks in Eritrea: A Growing Concern

The Evolving Landscape of Financial Crimes

The rapid advancement of technology has introduced new challenges to the detection and prevention of financial crimes. In Eritrea, anti-money laundering (AML) subject persons must stay informed about emerging financial crime risks and trends to avoid unwittingly becoming involved in illicit activities.

Emerging Technologies and Risks

Blockchain Technology and Virtual Assets

Blockchain technology has revolutionized virtual assets as payment products.
However, its misuse by wrongdoers exploiting high transaction speeds and anonymity poses a significant risk.
Effective legislation, regulation, and enforcement are crucial to prevent cross-border financial crime.

Virtual Assets (Privacy Coins)

Increase anonymity in transactions on the blockchain.
Susceptible to money laundering, terrorist financing, and other financial crimes.

Non-Fungible Tokens (NFTs)

Blockchain-based assets have increased in popularity but have a highly subjective value.
Conducive to money laundering and terrorist financing due to their easily manipulated value.
Provide a new means for the perpetration of known crimes, such as insider trading.

Fake News and Online Disinformation

Challenging to identify reliable online news sources due to the rise of fake news.
Exploitation of language-model AI systems like ChatGPT exacerbates this issue.
Deepfake technology enables the production of convincing but false content, creating a serious artificial intelligence crime threat.

Mitigating Emerging Financial Crime Risks

AML subject persons in Eritrea must identify and understand emerging financial crime risks.
Design mitigating controls to address these risks, including familiarizing themselves with emerging technologies.
Train employees adequately to identify and mitigate the risk posed by emerging financial crime risks.

Expert Assistance from Deloitte

Deloitte has significant experience in financial crime risk management and compliance. They can assist subject persons in setting up frameworks intended to mitigate the risk of their services being misused for money laundering, terrorist financing, or financial crimes.