Money Laundering and The Real Estate Sector - Points to Ponder by Abhishek Desai

The Real Estate sector contributes more than 10% of the GDP in Canada – estimated to be worth 225 billion in 2022.

A report produced by the Criminal Intelligence Service Canada (CISC), a national intelligence agency of the RCMP, focused on the scope and extent of money laundering in Canada. The agency found real estate was used extensively as a tool for criminal activity. According to the report, the proceeds of crime are used to buy the property through various schemes.

The AML Shop’s Abhishek Desai is here to give his expert insights on this important topic. Read the article by clicking the button below.

EFT Travel Rule Threshold - FINTRAC Policy Interpretation

There has been some uncertainty regarding when the travel rule obligations apply to international electronic fund transfers (“EFT”) or SWIFT MT-103 messages (or equivalent) (“Prescribed EFT Transactions”).  Specifically, the question being asked is “At what threshold does the travel rule obligation apply to Prescribed EFT Transactions?”

Marcelle Dadoun (AML Advisor at The AML Shop) is here to breakdown this topic in a thorough FINTRAC Policy Interpretation on the EFT Travel Rule Threshold.

Click the button below to read the full article.

OSC holds global crypto asset trading platforms accountable - Announcement

FOR IMMEDIATE RELEASE
June 22, 2022

TORONTO - The Ontario Securities Commission (OSC) announced today the outcome of two successful enforcement actions against non-compliant crypto asset trading platforms.

A panel of the Capital Markets Tribunal today approved a settlement agreement between the OSC and Bybit Fintech Limited (Bybit), incorporated in the British Virgin Islands, for failing to comply with Ontario securities law.

In a separate decision, a panel of the Capital Markets Tribunal ordered substantial monetary sanctions and a permanent market participation ban against Mek Global Limited, incorporated in the Republic of Seychelles, and PhoenixFin Pte. Ltd., incorporated in Singapore (collectively, KuCoin) for failing to comply with Ontario securities law.

Bybit and KuCoin both operate unregistered crypto asset trading platforms and allowed Ontario investors to trade securities without a prospectus or any exemption from the prospectus requirements.

“Foreign crypto asset trading platforms that want to operate in Ontario must play by the rules or face enforcement action,” said Jeff Kehoe, Director of Enforcement at the OSC. “The outcomes announced today should serve as a clear indication that we refuse to tolerate non-compliance with Ontario securities law.”

The OSC successfully obtained orders permanently banning KuCoin from participating in Ontario’s capital markets and requiring KuCoin to pay an administrative penalty of CAD $2,000,000 and a further $96,550.35 towards the costs of the OSC’s investigation.

Unlike KuCoin, Bybit responded to the OSC’s enforcement action, maintained an open dialogue, provided requested information, and committed to engaging in registration discussions. As part of a settlement agreement, Bybit has disgorged USD $2,468,910 and paid a further CAD $10,000 towards the cost of the OSC’s investigation. Bybit has also given an undertaking to the OSC, which holds the firm accountable for taking steps to bring its operations into compliance. This undertaking represents a legally enforceable commitment by Bybit to the OSC.

In addition, while registration discussions are ongoing, Bybit confirms that it will not accept new accounts for Ontario residents, offer any new products to existing accounts held by Ontario investors, or engage in any marketing and promotional activities targeted at Ontario residents. If registration discussions fail, Bybit confirms that it will wind up its Ontario operations.

For existing Ontario retail investors, Bybit confirms that it will require investors to wind down their positions in certain restricted products, such as contracts that involve leverage, margin, or the extension of credit. Any funds or assets remaining in Ontario retail investor accounts may be used for non-restricted products or withdrawn from the Bybit platform.

On March 29, 2021, the OSC warned crypto asset trading platforms that offer trading in derivatives or securities in Ontario that they must contact the OSC or face enforcement action. The warning included a deadline of April 19, 2021 for such platforms to start registration discussions. Despite this warning, Bybit and KuCoin did not contact the OSC by the deadline and continued operations in Ontario.

The OSC will continue to take action against non-compliant crypto asset trading platforms and are in contact with international securities regulators to exchange information to support enforcement action.

The OSC thanks the British Virgin Islands Financial Services Commission for their assistance in the Bybit matter, and the Seychelles Financial Services Authority for their assistance in the KuCoin matter.

All crypto asset trading platforms registered in Ontario are listed on the Registered Crypto Asset Trading Platforms page on the OSC’s website.

Investors are encouraged to check the registration of any person or business trying to sell investments or offer investment advice. This can be done by visiting the Check Before You Invest or the Registered Crypto Asset Trading Platforms pages on the OSC website. Investors can also sign up for email notifications when new warnings and alerts are issued and can follow the OSC’s Twitter feed at @OSC_News.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.

 

Press release via the Ontario Securities Commission.

Matt McGuire on Global Radio

Matt McGuire (Practice Leader at The AML Shop) was featured on The Mike Smyth Show (Global News) in advance of the Cullen Report release to discuss key issues in money-laundering in British Columbia. This powerful discussion touches on a variety of key AML topics including the impacts of money laundering on real-estate and the need for increased enforcement of financial crimes.

Securities, NFTs and the Changing Regulatory Landscape - WATCH VIDEO

Matt McGuire (The AML Shop Practice Leader) recently participated in a panel discussion on Securities, NFTs and the Changing Regulatory Landscape at the 2022 Alberta Technology Symposium.

The NFT boom of early 2021 created momentum around blockchain tokens as a powerful way to commoditize assets like art and intellectual property. Still, the technology’s lightning fast evolution means that NFTs are caught in a regulatory grey area that needs clarity. Consumer and investor protection requires building legal solid and governance policies around token issuances to avoid replicating the disastrous ICO bubble of 2018. The Canadian Blockchain Consortium is joined by industry members and legal experts to shed light on some of the critical issues raised by NFTs and discuss a path forward on market regulation.

Moderator:
Richard Jones, Q.C. - Litigation and Municipal Groups | Brownlee LLP
Speakers:
Melissa Smith, Partner | Borden Ladner Gervais LLP (BLG)
Philip Long Senior Manager and Blockchain Lead | KPMG Canada
Krista Rabidoux, CPA, CMA, EA, Partner | Andersen
Matt McGuire FCPA, FCA, CFF, CAMS, AMLP, CCI, Co-Founder | the AML shop

Matt McGuire The AML Shop Practice Leader, featured in Epoch Times

The AML Shop Practice Leader Matt McGuire has been called upon to comment on the news of new financial resources allocated to FINTRAC under the 2022 Federal Budget in the Epoch Times Feature Budget’s Plans for Financial Crimes Agency Prompts Concerns Over Impact on Crowdfunding. 


This article highlights a variety of news-worthy AML topics including the impacts of the Emergencies Act and types of Money Laundering issues in Canada within the context of the latest Federal Budget announcement.



Podcast: Fighting Financial Crime with Digital Identity with Eugenio DiMira

Listen to the latest episode of the SSI Orbit Podcast via northernblock.io, featuring The AML Shop’s Chief Identity Officer Eugenio DiMira.

This podcast episode discusses the hot topic of Financial Crimes and Digital Identity and addresses the following questions:

  1. What’s the global impact of money laundering today?

  2. How can Digital ID help prevent illicit financial flows?

  3. How can technology (e.g., device fingerprinting) make anti-money laundering and counter terrorist financing efforts faster, cheaper and more efficient?

  4. What is the Financial Action Task Force’s (FATF) Digital ID guidance?

  5. How can you layer multiple sources of identity (outside of government sources) to enhance Identification Assurance?

  6. How can you prevent money laundering through stronger Legal Entity Identity verifications?

  7. Can Open Banking succeed without Digital Identity? Are open banking and digital identity the same thing?

  8. What are some of the key Open Banking standards bodies that are active today?

  9. Does Open Banking make money laundering easier or more difficult?

The AML Shop client "Reyts Fintech Inc" wins 1st Place at DMZ Black Innovation Summit

The AML Shop client “Reyts Fintech Inc” has won the prestigious 1st place prize for top Black-led Startup at the 2022 DMZ Black Innovation Summit, a Ryerson-led program and a world-leading incubator for tech startups around the world.

The 2nd annual Black Innovation Summit provided an opportunity for 8 Black-led startups to pitch to a panel of judges to secure grant-funding for their business.

We at The AML shop want to wish Reyts Fintech congratulations on this well deserved honour!

Read more about Reyts Fintech Inc. and the DMZ Black Innovation Summit via the buttons below.

Matt McGuire featured in Global News

Global News has released a feature titled Over $154M tied to detained Chinese-Canadian oligarch invested in GTA real estate. This feature examines the financial footprint of Xiao Jianhua and features comments from The AML Shop’s Matt McGuire.

This informative piece discusses various AML related touch-points and in particular, how corporations in Canada can be established and leveraged for real estate transactions using foreign funds that might be subject to Canada’s proceeds of crime and terrorist financing act.

Click the button below to read this engaging feature and watch a video clip where Matt shares his insights on this this topic.

Canada imposes additional measures on Russia in response to Russia's attack on Ukraine


Global Affairs Canada has released an update on additional measures taken on Russia in response to Russia’s attack on Ukraine. This publication includes a list of new and expanding sanctions against specific individuals and entities. 

The sanctions include:

  • Stringent prohibitions on persons in Canada, and Canadians outside of Canada from engaging in any activity related to any property of these listed persons or providing financing or related services to them.

  • Prohibitions on the purchasing, or facilitating the purchase of Russian sovereign debt.

Read full details here

Specific Prohibitions are set out in the regulations and can be read at the below links:

The AML Shop's Matt McGuire on CTV's Power Play with Evan Solomon

What are the red flags raised by powers enacted under the Emergencies Act?

Watch Matt McGuire (The AML Shop Co-Founder and Practice Leader) discuss this hot topic with the Press Gallery and Evan Solomon on CTV's Power Play Overtime discussion.

Watch this segment during the February 21st episode, at the 29:48 minute mark by clicking the button below.