Financial Crime World

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Financial Sector at Risk: New Report Reveals High Levels of Money Laundering and Terrorist Financing

A recent report has sounded the alarm on the financial sector’s vulnerability to money laundering (ML) and terrorist financing (TF), with many areas of the industry exhibiting significant risk levels. The study, which assessed various sectors including wallet providers, exchanges, initial coin offerings (ICOs), over-the-counter services, peer-to-peer lending, and more, has highlighted the need for increased vigilance and regulation to combat these threats.

High-Risk Sectors

  • Wallet providers: 10 out of 14
  • Exchanges: 8 out of 14
  • ICOs: 7 out of 14

Several sectors were identified as being particularly high-risk, including:

  • Remote gambling: vulnerable to ML and TF
  • Land-based casinos: plagued by ML and TF in the past
  • Betting services: remain vulnerable to these threats

Moderate Risk Sectors

  • General insurance: 4 out of 14
  • Long-term business: 4 out of 14
  • Real estate agents, developers, and construction companies: scores ranging from 7 to 9 out of 14

Jurisdictional Terrorist Financing Risk

Gibraltar was assessed as having a low jurisdictional risk of terrorist financing, scoring 2 out of 14.

Overall Risk Scores

The combined threat and vulnerability scores for ML and TF were used to calculate an overall risk score for each sector. The results showed that many sectors are at high or medium-high risk, with only a few exhibiting low-risk profiles.

Conclusion

The report’s findings serve as a wake-up call for the financial sector, highlighting the importance of continued cooperation and vigilance in combating money laundering and terrorist financing. As the industry continues to evolve, it is crucial that we remain proactive in addressing these threats and protecting the integrity of our financial systems.

By working together, regulators, law enforcement agencies, and industry stakeholders can help to reduce these risks and protect the integrity of the financial system.