31/01/24

UK: Bitcoin “used to launder money in fraud scheme”, court hears

As published on: ccn.com, Wednesday 31 January, 2024. 

A woman in London is on trial for laundering crypto worth billions of dollars, stolen from Chinese investors.
The UK’s National Crime Agency is expanding its capabilities to combat cryptocurrency fraud.
The European Banking Authority is proposing an update to the AML/CFT regulations.
In a London court on Monday, prosecutors alleged that Wen Jian converted Bitcoin into cash and real estate, effectively laundering funds from a massive $6.3 billion fraud.

The fraud reportedly victimized nearly 130,000 investors in China in a period between 2014 and 2017.

Laundering $6.3 Billion in Chinese Fraud Scheme
The 42-year-old faces charges at London’s Southwark Crown Court for her role in concealing the origins of the stolen money. Despite facing three counts of money laundering, Wen Jian maintains her innocence and is not accused of participating in the initial fraudulent schemes.

Prosecutor Gillian Jones identified Zhang Yadi, also known as Qian Zhimin, as the mastermind behind the $6.3 billion fraud scheme. According to Jones, Zhang, who is cited in the indictment as the beneficiary of the laundered funds, escaped to Britain with a fake identity in 2017 when Chinese officials initiated an investigation into the fraudulent operations.

While associates connected to the fraud have been apprehended in China, Jones highlighted that Zhang has successfully evaded capture. Furthermore, the stolen funds have yet to be recovered and returned to the defrauded investors.

The jury learned that Zhang appointed Wen as a facade to obscure the origins of the pilfered funds, which were initially invested in Bitcoin to facilitate their transfer out of China.

Upon arriving in London in 2017, Zhang sought to transform the Bitcoin holdings back into tangible assets like cash, real estate, jewelry, or other valuable items, as explained by Prosecutor Gillian Jones.

Wen Jian has conceded her participation in the Bitcoin transactions, but the pivotal aspect of the trial revolves around discerning her level of awareness or suspicion regarding the illicit nature of the Bitcoin’s origins, as elucidated by Prosecutor Gillian Jones to the jury members.

The case is ongoing.

UK to Expand National Crypto Crime Unit
In a strategic move to combat financial crimes, the UK’s National Crime Agency (NCA) is set to enhance its capabilities in addressing cryptocurrency fraud. The expansion includes the recruitment of four seasoned investigators, specifically designated to the financial crime unit, to address the increasing incidents of corruption and fraud associated with blockchain technology.

Further strengthening its operations, the NCA’s Complex Financial Crime Team (CFCT) will integrate a new Digital Asset Disclosure Officer , extending its operational reach across various jurisdictions. This enhancement is aimed at ensuring a robust monitoring and enforcement mechanism in the evolving digital asset landscape.

Collaboratively, the team is poised to work in tandem with a dedicated surveillance unit and the police department. This coordinated effort is crucial for the in-depth investigation of high-profile cases involving fraud and money laundering, particularly those orchestrated by sophisticated, organized criminal networks.

The initiative encompasses a comprehensive approach to tackling criminal activities within the digital domain, specifically focusing on severe and harmful offenses related to cryptocurrency and virtual assets. This includes addressing sophisticated fraud and money laundering operations conducted by major organized crime syndicates and state-backed entities.

European Banking Authority Seeks to Fortify AML/CFT Standards for Crypto Providers
The European Banking Authority (EBA) is actively pursuing a comprehensive update to the Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) regulations, specifically targeting cryptocurrency service providers. Central to the EBA’s strategic initiative is the harmonization of AML/CFT guidelines across both payment service providers and crypto asset service providers (CASPs).

This alignment aims not only to standardize regulatory measures but also to significantly enhance the collaborative efficiency between these entities. A pivotal element of the proposed enhancements involves advancing the interoperability of protocols among CASPs. This development mandates CASPs to evolve their systems to facilitate the smooth and integrated exchange of information, underscoring the EBA’s commitment to ensuring a robust, transparent, and cohesive regulatory framework in the evolving digital finance landscape.

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Bitcoin Anti-Money Laundering UK Fraud