Understanding Suspicious Activity in Fintech, PSPs, and EMIs

💡 Insightful perspective on prepaid card risks in AML compliance. Prepaid instruments have undoubtedly enhanced financial accessibility and convenience, but they also present complex challenges from an AML/CFT standpoint. The anonymity, ease of loading, and cross-border portability make them susceptible to misuse for layering and structuring activities. Strengthening CDD/EDD frameworks, enhancing transaction monitoring capabilities, and fostering cross-border information sharing are key steps to mitigating these vulnerabilities. As financial products evolve, compliance programs must adapt in parallel, ensuring that innovation in payments does not come at the expense of financial integrity. #AML #Compliance #FinancialCrime #KYC #EDD #PrepaidCards #RiskManagement #AntiMoneyLaundering #TransactionMonitoring #FinancialIntegrity

2025 as of now, global AML (Anti-Money Laundering) fines have surged dramatically, reflecting an intensified regulatory crackdown on financial institutions and digital asset platforms. The first half of 2025 saw 139 penalties totaling $1.23 billion, representing a 417% increase over H1 2024, with cryptocurrency and fintech firms notably targeted by enforcement actions. Notable AML Fines in 2025 • OKX (Cryptocurrency Exchange): Fined over $500 million by the US Department of Justice, involving $84 million in civil fines and $420 million in forfeiture, linked to failures in KYC, transaction monitoring, and circumventing restrictions for US users. • Robinhood (Broker-Dealer): FINRA imposed a $29.75 million fine in March 2025 due to weak AML oversight and insufficient action on triggers and misconduct. • LPL Financial (US Broker): Fined $3 million by FINRA for inadequate SAR and CDD practices around penny stock trading. • Block Inc. (Cash App): Faced an $80 million collective regulatory penalty across 48 states for insufficient monitoring and policies, with a specific $1 million fine for AML lapses in January 2025. • Credit Suisse (Singapore): Fined S$5.8 million (~US$4.5 million) by MAS for weak AML/CFT protocols as part of a wider crackdown. • Bunq Bank (Netherlands): Fined €2.6 million for serious AML control deficiencies by Dutch regulators. • De Volksbank (Netherlands): Fined €2.5 million by DNB for insufficient compliance and oversight in AML systems. • MGM Grand & Cosmopolitan (Las Vegas): Joint settlement totaling $7.45 million for failures under the US Bank Secrecy Act regarding suspicious betting activity. • Commerzbank (Germany): Fined €1.45 million ($1.5 million) for gaps in AML controls and due diligence. Common Triggers for AML Enforcement: Most AML enforcement actions stem from repeatable and preventable weaknesses which has been the same for the last 2 decades. The following deficiencies frequently appear in regulatory findings: 1. Failure to Implement an Effective AML Program 2. Inadequate Know Your Customer (KYC) and Customer Due Diligence (CDD) 3. Ignoring Red Flags or Failing to File Suspicious Activity Reports (SARs) #aml #kyc #banks #crypto #fintech #USDOJ #FINRA #MAS #DNB #Germany #USA #Singapore #Europe FINRA U.S. Department of Justice Monetary Authority of Singapore (MAS) DNB #artificialintelligence #AI OKX Robinhood LPL Financial Block Credit Suisse bunq Volksbank · Banca Popolare dell’Alto Adige MGM Grand Hotel & Casino Las Vegas Commerzbank AG Revolut Barclays BitMEX #BSA #FinCEN #OFAC #US DOJ #MLR #POCA #FCA #6AMLD

"Micro Money Laundering: The Next Frontier in Financial Crime Risk" As digital ecosystems expand, micro money laundering (MML) is quietly becoming one of the most complex challenges for AML compliance. By moving small sums across multiple platforms and accounts, criminals exploit system thresholds and regulatory blind spots. Key Challenges: 1.High transaction volumes that mask suspicious activity 2.Fragmented oversight across banks, wallets, and fintechs 3.Rapidly evolving digital payment typologies 4. Limited data sharing across jurisdictions Strategic Priorities: 1. Leverage AI-driven behavioral analytics to detect micro-patterns. 2. Adopt unified monitoring frameworks across all transaction channels. 3. Evolve from static thresholds to adaptive risk models. 4. Enhance KYC lifecycle management with periodic revalidation. 5. Foster cross-institution intelligence sharing to strengthen defenses. Micro laundering is not about volume—it’s about velocity and invisibility. Tackling it demands data-driven vigilance, innovation, and collaboration across the financial ecosystem. #AML #Compliance #RiskManagement #FinCrime #FinancialServices #Innovation

⚠️🚨 Following the Fraud — How “Money Mules” Fuel the Global Financial Crime Machine 💣💀 📊How Money Mules Move Millions 🔶From fake banks to digital laundering rings — the invisible network behind your screen. 🟠Most people think the fraudster is the man who sends the scam email. But in reality — the real criminals are often hidden in plain sight. 🟠They’re called Money Mules. Not hackers. Not masterminds. But ordinary people — students, job seekers, small business owners — convinced to “help move funds” or “facilitate a transaction.” 🟨And that’s how billions of dirty dollars move through legitimate financial systems every year. 🏦💸 💡 The Anatomy of the Crime Fraudsters today don’t need physical banks — they have: 1️⃣ Fake “private banks” with cloned SWIFT codes and forged compliance seals. 2️⃣ Money mule networks that open accounts under false pretenses. 3️⃣ Digital laundering pipelines — fintech wallets, crypto exchanges, and shell firms. 🟠Every fake SBLC, PPP, or “investment funding” starts with one weak link — someone willing to lend their account or verify a transaction they don’t understand. 🧠 Here’s What Most Don’t Realize 🔸“Every mule is a bridge that turns cyber fraud into real-world loss.” 🔸Without them, the scam stops dead. With them, it becomes a multi-jurisdictional laundering chain that no compliance tool can easily trace. 🚨 What We’re Seeing Right Now 🔸Fake “Labuan banks” (like Asia Nexus, Quantum Nexus, etc.) issuing counterfeit SBLCs. 🔸Brokers using mule accounts in Indonesia, Dubai, or Cyprus for “transaction testing.” 🔸Compromised fintech APIs disguised as “fund validation servers.” 🔸Victims losing millions through perfectly formatted fake SWIFT PDFs. 🔸It’s no longer amateur crime — it’s industrialized deception. 🧩 What Needs to Change 💬 Financial institutions must stop treating mules as “low-level participants” — they are the operational backbone of global fraud. 💬 Regulators must trace money flow beyond origin — to the final layer where “innocent” accounts clean the proceeds. 💬 And professionals like us — in trade finance, compliance, and fintech — must educate clients relentlessly about verification before engagement. 🔒 Remember If a transaction involves: ➡️ “Private banker emails” from Gmail ➡️ “Ready, willing and able” SBLC letters ➡️ “MT799 confirmations via PDF” ➡️ “Activation or compliance fees” ➡️ “Bank officers” who can’t be verified 👉 You’re looking at the surface of an international laundering chain. 💬 Final Thought: The next time someone says, 🔰“I just lent my account for a friend’s transaction.” Tell them — they didn’t help a friend. They helped a fraud syndicate. #FinancialCrime #FraudAlert #MoneyMules #TradeFinance #Compliance #AML #KYC #BankingSecurity #ScamAwareness #SWIFT #CyberFraud #DueDiligence

⚠️🚨 Following the Fraud — How “Money Mules” Fuel the Global Financial Crime Machine 💣💀 📊How Money Mules Move Millions 🔶From fake banks to digital laundering rings — the invisible network behind your screen. 🟠Most people think the fraudster is the man who sends the scam email. But in reality — the real criminals are often hidden in plain sight. 🟠They’re called Money Mules. Not hackers. Not masterminds. But ordinary people — students, job seekers, small business owners — convinced to “help move funds” or “facilitate a transaction.” 🟨And that’s how billions of dirty dollars move through legitimate financial systems every year. 🏦💸 💡 The Anatomy of the Crime Fraudsters today don’t need physical banks — they have: 1️⃣ Fake “private banks” with cloned SWIFT codes and forged compliance seals. 2️⃣ Money mule networks that open accounts under false pretenses. 3️⃣ Digital laundering pipelines — fintech wallets, crypto exchanges, and shell firms. 🟠Every fake SBLC, PPP, or “investment funding” starts with one weak link — someone willing to lend their account or verify a transaction they don’t understand. 🧠 Here’s What Most Don’t Realize 🔸“Every mule is a bridge that turns cyber fraud into real-world loss.” 🔸Without them, the scam stops dead. With them, it becomes a multi-jurisdictional laundering chain that no compliance tool can easily trace. 🚨 What We’re Seeing Right Now 🔸Fake “Labuan banks” (like Asia Nexus, Quantum Nexus, etc.) issuing counterfeit SBLCs. 🔸Brokers using mule accounts in Indonesia, Dubai, or Cyprus for “transaction testing.” 🔸Compromised fintech APIs disguised as “fund validation servers.” 🔸Victims losing millions through perfectly formatted fake SWIFT PDFs. 🔸It’s no longer amateur crime — it’s industrialized deception. 🧩 What Needs to Change 💬 Financial institutions must stop treating mules as “low-level participants” — they are the operational backbone of global fraud. 💬 Regulators must trace money flow beyond origin — to the final layer where “innocent” accounts clean the proceeds. 💬 And professionals like us — in trade finance, compliance, and fintech — must educate clients relentlessly about verification before engagement. 🔒 Remember If a transaction involves: ➡️ “Private banker emails” from Gmail ➡️ “Ready, willing and able” SBLC letters ➡️ “MT799 confirmations via PDF” ➡️ “Activation or compliance fees” ➡️ “Bank officers” who can’t be verified 👉 You’re looking at the surface of an international laundering chain. 💬 Final Thought: The next time someone says, 🔰“I just lent my account for a friend’s transaction.” Tell them — they didn’t help a friend. They helped a fraud syndicate. #FinancialCrime #FraudAlert #MoneyMules #TradeFinance #Compliance #AML #KYC #BankingSecurity #ScamAwareness #SWIFT #CyberFraud #DueDiligence

Why is it that most UK/EEA banks and fintechs combine fraud and fincrime teams into one team, whereas the two teams are separate in the US? This was a key topic we discussed during our Money2020 Chatham House roundtable. This question was prompted by a conversation I had with Conor Walsh, Monzo US CEO, when we realized that both Revolut and Monzo Bank were similar in combining these two teams. Whereas this is still not widely adopted in the US. When the two teams are separate, it often leads to: - Loss in operational efficiency and - Data and investigations being siloed between the two teams Why is this the case in the UK/EEA region? - Fundamentally fraud rates have been lower in the UK/EEA region due to 3DSecure being highly prevalent in card payments. Hence, bank scams (Authorized Push Payment scams) and financial crime (money laundering, terrorist financing) take much more of a front seat in their operations. - When it comes to AML, the UK/EEA area has had to be much ahead of other regions in deploying more innovative AML typologies esp. around cross border money movement, just given that there are dozens of EEA region currencies unlike the US. - In short, lower fraud but higher AML risk has forced fintechs/banks in Europe to more quickly adopt data science and thereby build a layered defense. You’ll very commonly hear terms like “First line of defense” and “Second line of defense”.  “First line of defense” is more data science heavy and is usually led by data science leaders (kind of like my previous role at Revolut). “Second line of defense” is then led by Heads of Regulatory compliance or MLROs who bring a regulator's lens of view and perform an audit of the procedures from the first line. However, we are increasingly seeing many fintechs and banks in the US also adopt a similar mindset into merging these teams. What are some other reasons that might explain this dichotomy? And most importantly, curious to hear about exceptions to the norm – UK/EEA fintechs/banks that kept these teams separate or US fintechs/banks that are merging them?

I completely agree with the post below — such an interesting observation about how fraud and financial crime teams are structured differently across regions.

💰 Why Continuous Transaction Monitoring Is Necessary In today’s fast-paced digital banking environment, fraudsters don’t wait — and neither should your monitoring systems. Continuous transaction monitoring (CTM) ensures that every transaction is analyzed in real-time, helping financial institutions detect, prevent, and respond to suspicious activity before it causes damage. Here’s why it’s essential 👇 ✅ Real-Time Fraud Detection: Helps identify unusual transaction patterns instantly — such as high-value transfers, rapid fund movements, or cross-border anomalies. ✅ Regulatory Compliance: Continuous monitoring aligns with AML and KYC regulations, ensuring timely reporting of suspicious activity. ✅ Behavioral Insights: Tracks changes in user behavior over time to identify emerging risks or potential mule activity. ✅ Prevention Over Correction: Rather than investigating after a fraud occurs, continuous monitoring helps stop it before it spreads. ✅ Data-Driven Decision Making: AI-powered systems enhance accuracy and reduce false positives, improving overall operational efficiency. In a world where fraud never sleeps, continuous transaction monitoring acts as your organization’s 24×7 shield against financial crime. 🛡️ #TransactionMonitoring #FraudPrevention #AML #Compliance #FinCrime #RiskManagement #DigitalBanking #RegTech #FinancialSecurity

Before AML: We reacted to alerts after they appeared. The work was mostly volume management. Today: AML is behavioral intelligence. The value isn’t just spotting the red flag; it’s understanding why the behavior matters, how it fits into broader patterns, and how we protect the platform before the exposure becomes systemic. In my SAR case experience, the narrative often became the determining factor because it ultimately explains risk to regulators, not just the alert itself. As leading fintechs like PayPal continue to evolve how we handle high-risk, cross-border, and crypto-driven cases, this shift toward proactive interpretation over reactive detection matters more than ever. Which do you believe will shape the next decade more: AI-assisted risk scoring or investigator narrative skill? #FinancialCrime #AMLCompliance #BehavioralRisk #Fintech #CryptoRisk #RiskCulture #Investigations #SARNarratives

💼 Navigating AML/KYC Account Types in Fintech and Investment Banks: In the fast-evolving world of fintech and investment banking, understanding different account types and their AML/KYC requirements is key to staying compliant and protecting your institution. Here’s a quick rundown: 👤 #Personal_Accounts Think of these as everyday accounts for individuals. In fintech, basic e-KYC often opens doors for limited transactions, while full KYC unlocks complete services. Investment banks require solid identity proof and risk assessments here too, ensuring every customer is properly verified. 🏢 #BusinessCorporate_Accounts These are more complex. Companies bring higher risks, so verifying beneficial ownership, business legitimacy, and source of funds becomes crucial. Fintech startups and banks alike put these accounts through enhanced due diligence to avoid hidden risks. 🚨 #HighRisk_Accounts PEPs, offshore entities, or sectors like crypto demand extra caution. These accounts undergo enhanced checks, regular monitoring, and sanctions screening to keep financial crime at bay. 💳 #SpecialFintech_Accounts From wallets to crypto VASPs, fintech offers innovative accounts, but they come with layered AML safeguards—think tiered KYC, transaction caps, and blockchain analysis—to maintain compliance without stifling innovation. 🔍 #InvestmentBank_Accounts Clients here engage in sophisticated financial activities. KYC processes dive deep into identity, source of funds, investment goals, and ongoing behavior monitoring to manage risks effectively. The key? A risk-based, layered approach that’s flexible yet robust, balancing user experience and regulatory demands. #AML #KYC #Fintech #InvestmentBanking #Compliance #RiskManagement #FinancialCrimePrevention #CustomerDueDiligence