The European Union works on preventing money laundering, and the most recent step was changing the laws related to the anonymity of crypto and cash transactions in order to avoid the grey zones that used to lead to suspicious transactions.

New regulations

Thanks to the new Anti-Money Laundering (AML) regulations, the limit on cash payments will be set at €10,000, and if the transactions are anonymous, the limit will be €3,000.

On top of that, the legislation will affect the growing cryptocurrency market. Unidentified crypto wallets won’t be allowed, including all wallets operated by providers that aren’t authorized, including mobile, desktop, or browser-based wallets.

The laws will be implemented three years after the official introductions. However, according to Dillon, a law company from Dublin, they will be implemented before the deadline.

However, not everybody agrees with these laws. One of the members of the European Parliament, Patrick Breyer, a member of the German Pirate Party, is worried about financial freedom. In order to establish total financial independence, people have to be able to make anonymous transactions, according to him. He stated that the new laws could have economic and social consequences for EU citizens.

It’s unknown if new laws will be helpful when it comes to preventing money laundering. While some people believe that it might be a great help in preventing the issue, others are concerned about losing financial freedom and privacy.

On top of that, the concern about unbanked individuals who use cash and other companies that generate a lot of money is present. Also, self-custody wallets are a matter of concern, since there might be an opportunity to use various technological bypasses, including decentralized exchanges and privacy-centric blockchains.

The new regulations might mean a lot of changes to the crypto market in Europe. It might prevent financial innovation and inclusion, and decrease the use of cryptocurrencies in the region.

The exceptions

However, there are a few exceptions when it comes to the new regulations. Among them are private transactions, which don’t have any limits, so the flow of small transactions and personal ones will remain unchanged.

Also, the Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA) will be in charge of overseeing the whole process and its duty will be to coordinate national bodies and communicate with the authorities from EU countries.

The EU agreed on these exceptions in order to ensure fair and considerate laws and regulations, while at the same time preventing the major issue.

Source: Hogg, Lea: “New EU legislation prohibits unidentified cryptocurrency transactions”. March 27, 2024.

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Cal Chrustie and Peter German have asked for a comprehensive investigation into the ongoing problem represented by illicit funds and suspicious casino transactions in Ontario in the past few years. 

Suspicious Transaction Amounts Went Up by $1M a Day

Between 2019 and 2022, Ontario’s casinos recorded a massive rise in the size of flagged transactions, marking a rise of more than one million per day.

In 2019, the figure had reached CAD$334 million ($248 million), according to data from records obtained via a freedom of information request. By 2022, the same figure recorded an increase of $38 million.

During the same year, state regulators introduced a new set of regulations requiring casino operators to keep detailed logs of players wagering over $3,000 in a single transaction. They were also prompted to ask for the source of the respective funds and keep a close eye on any signs of money laundering. 

According to former Royal Canadian Mounted Police (RCMP) officer Cal Chrustie, in many of these instances where large sums of money are involved, their source is “illicit”. 

The investigator who specialized in complex money laundering and transnational crime cases further explained that while the numbers were “significant”, additional research of the transactions was necessary to issue a clear conclusion.

Chrustie also spoke about the potential money laundering activities that should be regarded as much more than regular financial crime since the illicit gains could fuel criminals like drug traffickers and other agencies that could threaten the security of the country.

The ex-RCMP officer added that relying on police authorities to assess reports of suspicious transactions would not suffice, given their overwhelming number. 

Besides the fraudulent casino funds problem, there is also a high risk of international fraudsters attempting to cheat the legal gambling market in Ontario. However, GeoComply reassured the public that licensed operators in Ontario continue to be the safest to play with, with special emphasis on customers being the highest protected category.

The “Dirty Money” Report on British Columbia’s Casinos

Ex-RCMP deputy commissioner Peter German compiled the “Dirty Money” report on British Columbia casinos. 

The report emphasized a number of recommendations that, when put into practice, were the main reason why the volume of suspicious transactions went down abruptly.

While German explained that it was not possible to draw any clear conclusions relying on Ontario’s raw figures, a lot of insight could be gained by looking at the funds in perspective and understanding the way they were generated. 

German also mentioned the matters of underreporting and overreporting, explaining the need for the regulator to get involved in assessing the quality of these transactions. 

British Columbia regulators introduced a similar set of rules similar to the ones Ontario is now using to considerably reduce the number of suspicious transactions. The measures were implemented after it was revealed the funds were used in a transnational money laundering effort. 

While the regulator had failed to comply with the reporting requirements concerning suspicious cash transactions in the past, the new rules generated excellent results, as presented by B.C. government figures. 

Namely, in 2015, B.C. casinos reported $153 million in suspicious transactions. The figure continued to drop on a yearly basis, reaching $3 million in 2022. In the meanwhile, Ontario’s online gambling industry announced excellent growth during its first year of existence.

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The study’s broader scope is an attempt to better understand the money laundering and terrorist financing failings in the casino sector, and specifically the junket sector. The majority of those originate in casino junket operators, the AMLC argues, with the study flagging multiple transactions that should have been reported but hadn’t.

Junket Operators Feed Operators Wrong Data

Essentially, the AMLC contends that junket operators have not been flagging and reporting all issues with relevant parties, in this case, their casino partners, allowing suspicious transactions to clear, and potentially breaking AML and CFT controls in the industry as they failed to disclose the transactions. The AMLC has stopped short of publicly naming the offenders but argued that junket operators linked to prominent resorts had been found to underperform insofar as this was concerned.

Junkets have been a particularly hot topic in Asia. After the near-blanket ban on junket operators in Macau, other jurisdictions have started taking the matter more seriously. Some junket operators tried to blindside their partner casinos by issuing blank reports and claiming that they had not detected any suspicious transactions whatsoever.

However, casinos which did the snooping on their own discovered discrepancies in the report. One particular property used CCTV to establish that there seemed to be large volumes of cash being exchanged which the junket had failed to flag as suspicious. The junket of that particular casino argued that it was a genuine mistake rather than a premeditated act.

Regardless, the suspicion remains. In the particular case cited above, the AMLC claims that the casino was able to nevertheless submit 507 Suspicious Transaction Reports, indicative that the operator was determined to ensure that it complies with AML and CFT rules.

AMLC Says Operators Need to Hold Junkets Accountable

There are ways to counter such bad practices, however. The AMLC insists that should casino operators want to, they can monitor their relationship with junkets and ensure that they impress upon the junkets that reporting of suspicious transactions must happen accurately and transparently.

One of the most serious issues discovered by the AMLC remains the exchange of physical cash on casino floors, which casinos would have to work to tackle actively by raising the stakes for junket operators who may be turning a blind eye to paying customers who could be breaking AML and CFT rules.

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