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Money Services Businesses Penalized for Failure to Adopt Robust Anti-Money Laundering Practices

Mount Equity Group Tokyo Japan > News > Business > Money Services Businesses Penalized for Failure to Adopt Robust Anti-Money Laundering Practices

Two recent federal enforcement actions—announced the same day—have underlined the need for crypto companies to carefully consider their anti-money laundering (AML) obligations or else risk significant penalties.

First, on August 8, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added Tornado Cash (Tornado) to the Specially Designated Nationals (SDN) list. Accordingly, Tornado generally will not be able to engage in transactions with U.S. persons.

Tornado is a virtual currency mixer that, according to OFAC, has been utilized to launder over $7 billion since its creation in 2019. Currency mixers collect digital assets in a pool, often obscuring their destination and origin. While this may be a legitimate way to protect crypto users’ privacy, the practice also can be used to obfuscate illicit activity. In its…

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