The Financial Conduct Authority (FCA) examined ongoing financial advice services to ensure consumers receive the services they pay for. The review analysed data from 22 firms regarding suitability reviews, finding they were mostly delivered. However, some clients declined reviews, and a small percentage of firms failed to offer them, raising concerns. The FCA expects firms to rectify any shortcomings and proactively contact affected consumers, potentially offering redress where services were not provided. The FCA also provided guidance on good and poor practices observed during the review. Further, they plan to review existing rules for ongoing advice considering market developments and the Consumer Duty. Consumers are advised to complain to firms directly if concerned, utilising resources like MoneyHelper and the Financial Ombudsman Service if needed.

Covering an article from Merkle Science reports on a $1.5 billion hack of the Bybit cryptocurrency exchange, highlighting vulnerabilities in multi-signature cold storage. The attackers manipulated the user interface of transaction verification tools, causing operators to unwittingly authorise a malicious transfer, and the stolen funds were then laundered through complex methods including DEXs, address layering and non-KYC exchanges. This incident is similar to breaches at WazirX and Radiant Capital, indicating a broader systemic issue. Bybit responded swiftly, freezing assets and processing withdrawals efficiently, while Safe Wallet implemented enhanced security measures, and the incident is used to discuss recommended countermeasures including MPC wallets and improved training, The article also links the Bybit hack to other exchange breaches and stresses the need for stronger security and blockchain forensics to protect digital assets.

The European Union has enacted significant sanctions against Russia in response to human rights abuses, its aggression against Ukraine, and hybrid threats. These measures specifically target individuals and entities responsible for severe human rights violations, the repression of civil society and democratic opposition, and those undermining the rule of law. Sanctions include travel bans, asset freezes, and prohibitions on providing funds to listed individuals and entities, including penal colonies, judicial figures involved in politically motivated cases, and high-level officials. Furthermore, the EU has imposed trade restrictions on equipment that could be used for internal repression or for monitoring telecommunications. These actions demonstrate the EU's condemnation of Russia's actions and its support for human rights and democracy.

This Episode covers the the European AI Office's repository of AI literacy practices, which is intended to help companies comply with EU regulations. It highlights limitations of the repository, such as the vague descriptions and KPIs, the broad size and sector categorisations, and its non-recommendatory nature. 

This research from CEPII examines the economic impact of sanctions on Russia, particularly concerning strategic and dual-use goods. Sanctions do not entirely block access to these items, but they do increase import prices, especially from non-sanctioning countries. The price index of Russian imports saw a notable jump after sanctions were implemented. Strategic goods have experienced a particularly steep increase in transportation and insurance costs. Despite China becoming a major supplier, sanctions have generally made obtaining crucial goods more challenging, costly and of lower quality for Russia.

A law firm, WGS Solicitors, and one of its partners, Bridget Catherine Miller, have been penalised by the Solicitors Disciplinary Tribunal (SDT) for breaches of anti-money laundering regulations. The firm admitted to failures, including improper handling of client funds and inadequate customer due diligence between 2017 and 2021. WGS Solicitors received a fine of £25,258, while Miller was fined £3,500. The SDT found that Miller, as the solicitor responsible for certain client matters, should have ensured necessary customer due diligence was conducted. Mitigating circumstances were considered, with the firm citing a failure to fully grasp the extent of the 2017 Money Laundering Regulations. The Law Gazette reported on the ruling, detailing the specifics of the charges and the resulting penalties, alongside other legal news and resources.

FinCrime Central reports that the UK Gambling Commission is concerned about the gambling industry's AML compliance, highlighting failures in scrutinising customer data and verifying the source of funds. The rise of AI-generated fake documents and cryptocurrency use for illegal transactions are significant emerging threats. The Commission is piloting financial risk assessments and collaborating with UK banks to combat gambling-related financial harm. Other articles discuss a Belgian sanctions dilemma, dismantling a money laundering syndicate, and South Korea reversing its ban on institutional crypto trading. These issues collectively emphasise the need for robust AML measures and vigilance against financial crime in an evolving landscape.

The White House document details an executive order mandating increased Presidential oversight of independent regulatory agencies. This order seeks to ensure these agencies are accountable to the President and, through him, to the American people, by requiring regulatory actions to be reviewed by the Office of Information and Regulatory Affairs (OIRA). The Government Executive article reports on this same executive order, highlighting its aim to curtail the autonomy of agencies like the FCC, FTC, and SEC. It cites experts who predict potential legal challenges, as Congress has historically shielded these agencies from White House intervention. The directive also restricts executive branch employees from interpreting laws in ways that contradict Presidential or Attorney General opinions. Furthermore, the order calls for agency leaders to consult with the administration and for the OMB to manage agency performance and funding.

A recent executive order signed by President Trump has paused future investigations and enforcement actions related to the Foreign Corrupt Practices Act (FCPA). This order directs the US Attorney General to revise FCPA guidelines, potentially prioritising American economic interests and foreign policy objectives. While the FCPA itself remains law, this halt could create uncertainty, particularly regarding international bribery laws. It is important to note, though, that other bribery laws will remain in effect. Companies must still maintain compliance programs due to potential future enforcement and international anti-corruption laws. Businesses should also increase their due diligence in regions where cartels operate.

The episode highlights a shift in global anti-corruption efforts, spurred by the US's recent decision to retreat from this arena. It argues that the UK must now step up, filling the void left by the US, which was historically a leader in combating financial crime and kleptocracy. The piece criticises the UK's past involvement in facilitating corruption through tax havens and anonymous shell companies but notes recent improvements in transparency and law enforcement. It suggests that reversing these improvements would be a mistake, urging the UK to prioritise the rule of law over short-term economic gains, especially with Trump's recent policy. 

Hong Kong's Securities and Futures Commission (SFC) has released a regulatory roadmap called "A-S-P-I-Re" to future-proof the region's virtual asset ecosystem. This framework, detailed in the document, addresses the complexities of the virtual asset market, valued at over US$3 trillion, and the need for balanced regulation. The roadmap's five pillars - Access, Safeguards, Products, Infrastructure, and Relationships - outline 12 initiatives designed to streamline market access, optimise compliance, expand product offerings, modernise infrastructure, and empower stakeholders. It responds to the evolving landscape with strategies for managing liquidity, regulatory arbitrage, and investor protection. The SFC seeks to strike a balance between promoting innovation and mitigating risks by harmonising global standards and integrating traditional finance principles with blockchain technologies. Ultimately, the roadmap aims to solidify Hong Kong's position as a trusted hub for virtual asset liquidity through pragmatic and adaptive measures.

Criminal elements are increasingly exploiting cryptocurrency platforms, utilising sophisticated technologies like AI to perpetrate fraud and launder illicit funds. Regulators worldwide are responding with increased scrutiny and enforcement actions against crypto exchanges, particularly concerning anti-money laundering compliance. AUSTRAC, the Australian financial crimes regulator, has put numerous local exchanges on notice for failing to report suspicious transactions, reflecting a broader effort to combat criminal exploitation of digital assets. The crypto industry argues for clearer regulatory frameworks to differentiate legitimate businesses from illicit actors, emphasising the need for balanced regulation that fosters innovation while protecting investors. The interplay of technological advancement and regulatory oversight is crucial for ensuring the future adoption of crypto and combating financial crime within the digital asset space. Some jurisdictions are now becoming more crypto friendly, with appointments of figures who favour digital asset innovation.

AUSTRAC, the Australian financial crimes regulator, is scrutinising cryptocurrency exchanges due to concerns about money laundering and the financing of illegal activities. The regulator has issued notices to 50 exchanges suspected of failing to report suspicious transactions and has already taken action against several firms. These actions include deregistering some exchanges and imposing conditions on others. The cryptocurrency industry is advocating for clearer regulations, arguing that compliance is expensive and that legitimate businesses are being unfairly tarnished. The industry asserts its technology is better equipped at identifying and stopping illicit activity than traditional financial institutions. Despite some international interest in crypto assets, AUSTRAC remains concerned about the potential for misuse due to the ease of moving large sums across borders.

The Council of the European Union updated its list of non-cooperative tax jurisdictions, retaining the same 11 nations previously identified. The update acknowledges cooperative efforts from some jurisdictions to improve tax governance. Costa Rica and Curaçao were removed from a monitoring document after addressing deficiencies in their tax information exchange. Brunei Darussalam has committed to amending its foreign-source income exemption regime. The EU's list, established in 2017, aims to promote global tax good governance by assessing jurisdictions against criteria including tax transparency and fair taxation. The Council plans to revise the list again in October 2025.

FinCrime Central reports the arrest of former Mauritius Prime Minister Pravind Jugnauth amidst a money-laundering scandal. The article details allegations of financial irregularities, police raids uncovering incriminating evidence, and the potential misuse of political power. It examines the political repercussions for Mauritius, which includes scrutiny of his legacy and the country's ongoing struggle with corruption. Furthermore, the article highlights Jugnauth's expected legal proceedings and speculates on the long-term impact on the Mauritian political system. Beyond the Mauritian scandal, the publication also covers anti-money laundering efforts globally. The related articles address Austrac's crackdown on crypto firms, the FCA investigation into Barclays, and Mastercard’s AI-powered AML expansion.

Increased scrutiny of shadow fleets is causing waves in marine re/insurance as regulatory bodies intensify sanction enforcement, particularly concerning Russian oil. Ship-to-ship oil transfers and opaque ownership structures are key evasion tactics under watch. Flag states and international bodies are taking action, with Panama deregistering vessels and the EU expanding sanctions. The US is also increasing pressure, sanctioning tankers and firms involved in Russian oil trade. Uncertainty around future policies in the US and Europe adds to the complexity, while the insurance sector closely monitors compliance in light of potential maritime casualties.

Discussing Amlcube.com 's recent document covering five of the most significant crypto crimes in history. The report highlights collapses at FTX, OneCoin, BitConnect, PlusToken and Thodex. FTX saw $8 billion disappear due to diverted customer deposits. OneCoin, BitConnect and PlusToken are exposed as Ponzi schemes or exit scams. Thodex involved a CEO fleeing with $2 billion, leaving users locked out of their accounts.

South African financial institutions face a rising tide of financial crime enabled by artificial intelligence. Nearly 60% have observed an increase in these technologically advanced crimes, driving up compliance costs to an estimated $1.4 billion. Firms are investing in AI-powered monitoring systems and blockchain to combat this growing threat. Public-private partnerships are increasingly important for sharing intelligence and developing counter-measures, as illustrated by South Africa's Project Blood Orange. Customer expectations for seamless, secure services create a need for financial institutions to balance robust security measures with customer experience. Many institutions acknowledge the need to strengthen their ability to combat AI-driven fraud despite the measures in place.

The collection of articles from McKinsey on Risk addresses institutional resilience in the face of global challenges. It emphasises strategic approaches to risk management, moving beyond traditional defensive measures. Several articles explore specific risks, including ransomware, non-financial institutional risk and the impact of climate change. The collection provides valuable insights for firms looking to navigate constant disruption while incorporating greater digital agility. Another focus is the importance of integrating risk management with digital transformation in financial institutions. Ultimately, the goal is to assist organisations in adapting and thriving amid continuing uncertainty.

Crypto lending, borrowing, and staking involve users transferring crypto-assets in exchange for collateral or future returns. This system, along with Decentralised Finance (DeFi), aims to replicate traditional finance on blockchain networks, but without intermediaries. The EU's engagement with DeFi is currently limited, with the main activities being staking, lending, borrowing, and exchanging crypto-assets. However, potential risks exist including money laundering, market volatility, and ICT vulnerabilities, particularly those concerning smart contracts. Consumer protection is also a concern due to misleading information and insufficient disclosures. Regulators like the EBA and ESMA are monitoring these developments, and the European Commission is considering the implications, especially regarding consumer protection and financial stability.