FinTRAC Report Warns of Money Laundering Through Bitcoin ATMs
FinTRAC Report on Bitcoin ATMs and Money Laundering
Bitcoin ATMs are becoming a key tool for money launderers, according to a new report from Canada’s financial intelligence unit, FinTRAC. The report highlights how the cash deposited into these ATMs is essentially untraceable, making it an attractive option for criminals looking to launder money.
In the advisory published by FinTRAC, suspicious transaction reports were analyzed, revealing links between cryptocurrency ATMs and suspected cases of fraud, sex trafficking, and cybercrimes such as hacks. The report also identified suspicious transactions traced to virtual currency exchanges in jurisdictions with weak anti-money-laundering controls or economic sanctions.
Companies that deal in virtual currencies, including operators of bitcoin ATMs, are required to report certain transactions to FinTRAC. Failure to comply with reporting requirements can result in penalties, as seen with the recent $6-million penalty imposed on Binance Holdings Ltd., the world’s largest cryptocurrency exchange.
Concerns Raised by FinTRAC Hack
The penalty issued by FinTRAC comes amidst a global crackdown on the cryptocurrency sector, with Binance agreeing to pay a hefty sum as part of a plea deal in the U.S. after admitting to failures in its anti-money-laundering controls. FinTRAC’s advisory on cryptocurrency ATMs aims to help operators identify suspicious transactions, particularly those involving large volumes of small amounts being sent to dark web marketplaces.
The watchdog’s analysis revealed that many suspicious transactions took place during late hours, with hot spots for bitcoin ATM-related reports in major Canadian cities. Enhanced due diligence by ATM operators, including the use of blockchain analysis tools, is recommended to identify risky transactions and red flags.
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