Explore AML & Sanctions Compliance Resources

The conflict in Ukraine saw a number of banking sanctions levied against Russia. Concerns were raised early on about the possibility of sanctioned Russian parties using the less regulated crypto industry to exploit loopholes that allow them to move money out of the country.

Sanctions are an important tool the international community can use to change or influence the behavior of a country or regime that is violating human rights or committing other offences. While sanctions compliance is critically important, over-compliance may have serious commercial impacts on law-abiding businesses and even ordinary citizens of a sanctioned country.

The regulation of stablecoins has become an increasingly pressing priority after the catastrophic crash of Terra, an algorithmic stablecoin, which sparked a "crypto winter" and crashed the value of Bitcoin and other leading digital currencies. Since then, many exchanges and crypto companies have gone into liquidation or paused trading. The crash proved a harsh wake-up call for many consumers, anxious to see regulation of the riskier parts of the digital asset landscape. However, the fact remains that deregulation and innovation have always been significant drawcards for the DeFi community, and there are still many concerns over the way regulation may impact blockchain and distributed ledgers. The UK and the US governments have made significant moves toward regulating stablecoins as the first step towards connecting crypto assets to the broader financial system.

Understanding sources of funds and sources of wealth form a crucial part of combatting money laundering and terrorist financing. When sources of funds and wealth do not match the profile of customers or potential customers are involved in criminal activities. Financial companies have a duty to report their suspicions to relevant domestic authorities.