Compliance, Money Laundering, KYC, do I dare to mention it?

Well, perhaps I dare, but don’t shoot me, perhaps a little read before I befall your prosecution.

So, this is where I tell you, I come from a legal background (not a lawyer, honest, no need to hate me and some are truly fab and amazing!). After twenty five years of being a Manager within the legal industry I finally retired last year, admittedly very early 🙂 so that I could invest more time in understanding, acceptance and utilisation of digital currency; so I guess I put my money where my mouth is and got pro-actively involved with the shaping of our digital currency World.

Do I miss it, NO, do I miss the monthly pay cheque, well honestly, yes, but my Bank Manager probably misses it more!!

So as many of you will already be very aware the Legal Industry and Financial Industry are Compliance Regulated and regardless of a practice’s size, are bound to ensure their Regulatory Compliance or face the consequences of any, on the spot investigation, which identifies a failure that breaches their Regulatory requirements.

Now, I had the pleasure of working at a wide range of large and International law firms, where Money Laundering and Compliance training was mandatory and a hot topic for all across the firm who were exposed or alerted to a potential breach in Compliance, and this included all Lawyers (including those sitting comfortably in the God’s), Secretaries, Accounting Staff, etc. with absolutely no exception with training kept fresh and up to date and of course, absolutely compliant to the Regulations.

The reason? Very simply, is that the bad guys will do and try anything to “clean” their money.  Really, are you for real? Yes, sadly I am, and sometimes not from the initial outset of an instruction to a law firm. There is always a lot of focus when a new client is KYC’d (know your client through individual disclosure documents, meeting Compliance Regulations). However, such attempted regulatory breaches can occur at a far later stage, when the transaction is more progressed, when perhaps monetary deposits from a client are received into the firm’s client account BUT they do not arrive from the correct source that you would naturally expect them to be received from via the banking system.

Such instances, should they occur, require to be immediately red flagged, segregated and investigated by those designated with responsibility for the firm’s Money Laundering alerted, in order to immediately carry out investigation and provide satisfactory explanations (or not) before anything can proceed, thus directly stopping any “bad guy’s” in their tracks!

So simply put, the “bad guy’s” will do absolutely anything to try give their “dirty money” a 90 degree wash cycle clean, by any means, utilising any service, to achieve a bright white wash finish. Once clean, that is it, job done, all clean and fresh, legitimate and good to go.

Now, no-one within the eco-system cannot fail to be aware of the passionate feelings that are held by many within the sphere regarding KYC and the conundrum this generates.  In order to fully appreciate the cross-section of feeling that is held, you have to appreciate the thinking around the ethos of how and why the digital currency world was created and thus evolve into the future; and boy, do passions run high!!!

I myself remain torn, I would never have appreciated how proactively, creatively and persistently the “bad guys” work to generate a bright white wash finish for their “dirty money”, had I not had my experience within the law, truthfully, perhaps, I would not even believed it, had it not been for this real time experience!!!

So, whilst not wishing to compromise on any of the ethos of digital currency, I face the conundrum of how to stop the “bad guys” creatively finding a target for their bright white wash requirements for their dirty notes.

So, I am really keen to hear from both sides of the argument, let me know your thoughts and aspiration for our digital currency World and the “bad guy” conundrum because please believe me, it is real!!

6 Comments

    • Thank you so much for your lovely post and I am absolutely thrilled that you found it beneficial. Compliance/Money Laundering/Regulation is/can be a bit of a dry subject and one that many find very difficult to aligning to because it is a “requirements”. Requirements are enforced and as humanity knows, it is built within each of us to be resistant to enforcement. Humanity prefers to evaluate a situation individually using their fight or flight mechanism. When enforcement occurs and all choice is removed the “action” which is enforced is one that is not welcomed and there is a natural feeling of resentment due its enforcement as free speech and free choice is removed.

      I am lovin’ that Bro of yours, he sounds like a really rounded guy if Digital Finance News appeals to him. DFN is about pulling information out of the public domain that has yet to go mainstream and taking the piece and approaching it lodgicially from cross-sectional angles and cross-sectional members of humanity who may be affected by it or how are causing it or have the power to put it right but, for whatever reason, choose to ignore it! We also apply a mathematical equation on each piece to see where the Money, Fiat or Bitcoin is likely to be impacted + or – so that we may generate a factual = within the piece. I myself am not a mathematician as I have four symbols and a calculator under my belt.

      Our Mathematical source is based at Exeter University and we are very lucky to work collaboratively with two of their Under Graduates who respectfully got 2:1 + 1st = AMAZING MATHMATICIANS on this particular part of each Article where there clearly is a fiat/Bitcoin monetary flow.

      With regard to my first Article, so inspired have I been with the response which DFN has received from it and that I and the team have decided to write a weekly piece on the subject to keep everyone up to date on legislation and regulatory changes and what other industries find that the governing body have found it necessary to implement it as a mandatory requirement for the future.

      So on that note, a little snip it that I missed out of the first Article but will be included in the second is the following:-

      There are many, many safety nets within the Regulatory requirements of the Law to ensure that at no time does the Industry itself find itself or its’ related Brand being caught up in a Money Laundering scandle they have adopted a conformity approach of “layering”.

      So what that actually means is that ANYBODY who works on a client transactional matter where it attracts a breach of the regulation for anti-money laundering will be prosecuted for their involvement of that breach. So that means the following, Partner, Lawyer/s, Trainees, Para-legal’s, Legal Secretaries, Accounts Staff all who have virtually touched the file are implicit to the positivity and negativity of that file. Involvement means Implicit, Implicit means Independent Investigation, Independent Investigation means Regulator Involvement, Regulator Involvement means an evidence based finding will be required, Evidence based finding confirming breach results in up to a CUSTODIAL SENTENCE for a legal secretary that can mean up to five years inside Jail with the related criminal conviction which would mean that no other Law firm anywhere in the World would touch her and that is just referencing the secretaries!

      So many non-specialised secretaries regularly ask themselves why do Legal Secretaries earn that much money, what do they actually do and what do they do to add value that justifies that inflated salary. I think the potential of five years in Jail might just be a starting point in giving that rounded answer!

      Lovely to meet you, please come by soon and do follow us on Twitter to catch up with the latest of our news! Kindest, x

      • Ideally the concept is to revmoe the mess that has been created with factional reserve banking. Right now so much power is in the hands of the central banks. This power gives them the ability to control the amount of currency that is in circulation. In essence money is created out of thin air with no weight to it like the gold standard created. Money is built on trust in the value of that currency, which is very scary. You can even see in recent times how this type of system has created massive problems and will only get worse as time goes on. The only way I personally feel that currency can be fixed since we left the gold standard is to create a new currency with a relative value unit assigned to it. The relative value can be tied to something tangible. To supply a certain good or service it requires certain resources. Those resources being natural, human and others. For example it takes a specific amount of resources to produce a car. Machines, equipment, people working on it, natural resources like metal, plastics and time. These factors can be used to produce a RV for that car. Unfortunately I think there is so much money in circulation, that it would be near impossible to go back to the gold standard as there may not be enough gold available in circulation to match out the currency to. Why not create a balance of the commons of ALL available tangible resources and not just gold?The concepts I like of BitCoin are the fact that there is no central authority for currency. What you produce is what you own. You actually own that currency that you have produced using your resources and it has value based on the fact that others had to go through the same create that currency as you did. The idea of using CPU cycles is very geeky and not sustainable. The idea though that you have this resource and by using that resource you are producing something that holds value amongst those doing the same type of work place the value and trust in that currency. So when you go to work based on your education, work experience, skills, time spend doing your job, the actual work being done and even the value your employer feels you are worth to them can all be used as factors. That value of currency that you produce has no value that is set by factional reserve banking and the amount of currency in circulation. It is based on a true tangible asset like the gold standard used to be.Just my two cents.

  1. People don’t think anonymity through carefully. If the owners of a digital currency website remain anonymous, we all get tense because it means they could disappear with our money. That fear seems reasonable. The second is, if that company gets caught by some government and our bitcoins get seized, say bye bye. You are only a username. Do you think the government is going to release your bitcoins into your hands, because you say so? In the real world what matters is whether I trust the company that I am handing my details to. If they are in the US, they HAVE TO give up all data if requested. That is NOT the case elsewhere in the world. Does anyone else know what countries respect financial customer privacy?

  2. The trend of technology trgouhhout history has been to put ever more power into the hands of the individual. It is my hope that ultimately it will become impossible for governments to force us to pay taxes. This will be the turning point, at which taxation becomes strictly voluntary. Citizenship will become voluntary, opening governance up to the free market. Citizens will become consumers. Governments will become producers. Market forces will push governments, at last, to actually do what their citizens want, or face extinction when they lose their citizenship to their competitors.I’m sure that many imagine that necessarily this will produce anarchy. They assume that if laws/rules aren’t forced on us, we will not volunteer to follow them. But if you were faced with a choice between going it alone amid anarchy or seeking protection by joining a society whose laws and principles resemble your own, would you not choose to work as part of a society? If no existing society fit your needs, would you not try to create one?

Leave a Reply