EMERGING RISKS IN FINANCIAL CRIME PREVENTION: THAILAND EDITION
The rapidly evolving landscape of financial crimes in Thailand poses significant challenges for anti-money laundering (AML) subject persons. New technologies, such as artificial intelligence (AI), blockchain, and deepfake technology, are creating new risks that can be exploited by criminals to launder money, finance terrorism, and commit other financial crimes.
BLOCKCHAIN TECHNOLOGY: A DOUBLE-EDGED SWORD
The Potential of Blockchain Technology
Blockchain technology has the potential to revolutionize the way we conduct financial transactions. However, it also raises concerns about:
- Anonymity: The ability to conceal identities and conduct transactions anonymously.
- Speed: The rapid execution of transactions without proper verification.
- Regulation: The lack of effective legislation and enforcement in this area.
Risks Associated with Blockchain Technology
The lack of effective legislation and enforcement in the blockchain space poses a significant risk to cross-border financial crime prevention frameworks. AML subject persons must be aware of these risks and take steps to mitigate them.
NON-FUNGIBLE TOKENS (NFTs): A NEW MEANS OF MONEY LAUNDERING
The Rise of NFTs
The rise of NFTs has brought with it new opportunities for money laundering and terrorist financing. Their subjective value and ease of manipulation make them conducive to these types of crimes.
- Subjective Value: NFTs have no inherent value, making them susceptible to price manipulation.
- Ease of Manipulation: NFTs can be easily created, purchased, and sold without proper verification.
Case Study: Insider Trading
A recent case highlighted the use of NFTs in insider trading. This demonstrates the potential for NFTs to be used in financial crimes.
FAKE NEWS AND ONLINE DISINFORMATION: A NEW CHALLENGE FOR AML SUBJECT PERSONS
The Spread of Fake News and Online Disinformation
The spread of fake news and online disinformation is becoming increasingly prevalent, making it more challenging for AML subject persons to identify reliable online sources.
- Language-Model AI Systems: The rise of language-model AI systems like ChatGPT exacerbates this issue.
- Difficulty in Verification: It becomes increasingly difficult to verify the accuracy of online information.
DEEPFAKE TECHNOLOGY: A SERIOUS THREAT TO SOCIETY
The Potential Misuse of Deepfake Technology
Deepfake technology enables the production of convincing content that can be used to spread disinformation and deceive others. Its potential misuse in financial crimes, such as fraud and extortion, is alarming.
- Production of Convincing Content: Deepfake technology allows for the creation of realistic videos, images, and audio recordings.
- Spread of Disinformation: Deepfakes can be used to spread false information and deceive others.
MITIGATING THE RISKS POSED BY EMERGING FINANCIAL CRIME RISKS
Identifying and Understanding Risks
To address these emerging risks, AML subject persons should:
- Identify Corresponding Risks: Understand the potential threats associated with new technologies.
- Design Mitigating Controls: Implement controls to prevent the misuse of new technologies.
Adequate Training for Employees
It is also essential to ensure that employees are adequately trained on:
- Accurate, Reliable, and Relevant Sources: Verify the accuracy of online information.
- Due Diligence on Clients: Collect accurate due diligence on clients to prevent financial crimes.