Canada Ramps Up Sanctions on Haiti + Almost $1 Billion pay out from crypto fraud case

GM! This is The Risk Radar. Let’s dive into the latest AML/KYC news

Nearly $1 Billion Boost: U.S. Terrorism Victims Fund Set for Major Payout in 2025

Special Master Mary Patrice Brown has just announced that a whopping $940 million is ready to be dished out by January 1, 2025, to all eligible claimants of the U.S. Victims of State Sponsored Terrorism Fund. This Fund, constantly beefed up by fresh deposits, is set to make its fifth-round payouts, thanks to hefty penalties collected from big cases like United States v. Binance Holdings Limited.

Nicole M. Argentieri, the Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division, shared her pride in overseeing a Fund that has already delivered over $6 billion to victims of state sponsored terrorism. With this next round, they’re looking to push that figure close to $7 billion by 2025. The team's relentless pursuit of financial crimes under the Money Laundering and Asset Recovery Section’s Bank Integrity Unit ensures that those messing with U.S. financial laws and security are held accountable.

Since its inception, set up by Congress and diligently managed by the Criminal Division, the Fund has supported thousands through four rounds of distributions and an extra lump-sum catch-up. Beyond an initial $1 billion from Congress, the kitty has been topped up through fines and penalties from various Justice Department actions, including a major $898 million forfeiture by Binance for flouting key financial and security regulations.

Binance, caught in the act of prioritizing profits over legal compliance, admitted to failures including unregistered money transmitting and inadequate anti-money laundering measures which directly contradicted U.S. sanctions, especially dealings with Iran. Their hefty fine now fuels the Fund's latest round of support for victims.

For those looking to apply or wondering if they're still eligible—fret not! If you were eligible in past rounds, you’re automatically considered for this next one too. No need for a fresh application. Just mark your calendars for the July 1 application deadline for new claimants.

Crypto Capers: A High-Tech Heist with Real-World Consequences

In what could be mistaken for a plot from a cyber-crime novel, Shane Hampton and Michael Kane have faced the music for their roles in manipulating cryptocurrency markets. Hampton, hailing from Philadelphia, has been sentenced to two years and 11 months in prison, while Miami Beach’s own Michael Kane will spend three years and nine months behind bars. Their crimes involved a sophisticated scheme using a trading bot to inflate the price of Hydrogen Technology’s cryptocurrency, HYDRO, tricking investors into buying at artificially high prices.

Legal Groundbreaking: Cryptocurrency Meets Securities Law This case marks a groundbreaking moment in legal history, as it was during this trial that a cryptocurrency was recognized as a security under federal law for the first time. This pivotal decision has set a legal precedent that could affect how cryptocurrencies are regulated and prosecuted in the future.

The Mechanics of Manipulation The mechanics of their scheme were intricate. With the help of Moonwalkers Trading Limited from South Africa, the duo used an automated trading application to simulate market activities. These weren't just any activities; they involved $7 million in "wash trades" and over $300 million in "spoof trades" designed to mislead investors. This manipulation led to $2 million in profits from inflated sales of HYDRO over a period of 10 months.

Legal Ramifications and Beyond Both Kane and Hampton faced serious charges, including conspiracy to commit securities price manipulation and wire fraud. Kane pled guilty, while Hampton was convicted by a jury. Their actions, now labeled as investment contracts, confirm HYDRO as a security, thereby extending the reach of federal securities laws over similar cryptocurrency cases.

Enforcement and Echoes in the Financial World This episode underscores the commitment of U.S. law enforcement to regulate and control the freewheeling domain of cryptocurrency markets. The FBI’s involvement and the stern sentences handed down reflect a clear message: fraudulent financial activities, even in the relatively new crypto markets, will not go unchecked.

The saga of HYDRO not only highlights the potential for digital market manipulation but also signals a maturing approach to cryptocurrency regulation and enforcement. As this sector continues to evolve, the implications of this case will likely influence both future legal interpretations and the development of cryptocurrency market practices.

Canada Ramps Up Sanctions on Haiti: A Closer Look at the New Measures

Tougher Sanctions Kick In As of June 21, 2024, Canada's taken a firmer stance on Haiti's turmoil by expanding the Special Economic Measures (Haiti) Regulations. These latest amendments, effective from June 20, have put three additional individuals on the naughty list under Schedule 1 of the Regulations. These folks aren't just anyone—they're identified gang leaders who've been throwing wrenches in the works of Haiti's peace, security, and stability.

What's in the Sanctions Kit? These amended regulations aren't just a slap on the wrist; they pack a financial wallop by freezing any assets these individuals might have lurking in Canada. But there’s more: The rules strictly prohibit anyone in Canada—and Canadian folks abroad—from dealing with the property of these designated persons. This includes facilitating transactions, providing financial services, or making goods available related to the sanctioned individuals' assets.

Crossing Borders? Think Again The folks on this list won’t be exploring the Great White North anytime soon, as they’re also deemed inadmissible under Canada’s Immigration and Refugee Protection Act. It's a solid move to prevent these individuals from stepping foot on Canadian soil.

A Heads-Up to Businesses For businesses navigating this tricky terrain, staying on top of these sanctions is a must. Regulations under the Special Economic Measures Act require Canadian entities to keep a sharp eye and disclose any property or transactions tied to folks listed in Schedule 1 to the RCMP. This ongoing vigilance ensures compliance and keeps businesses out of hot water.

As Canada tightens its legal grip, those involved need to measure their steps carefully in this evolving sanctions landscape. It’s about maintaining peace and human rights, and Canada’s making sure its economic measures hit where they hurt to support stability in Haiti.