Combating Money Laundering in an Age of Technology and Innovation

36 Pages Posted: 9 Jul 2020 Last revised: 6 Mar 2021

Date Written: August 15, 2020

Abstract

Financial technology (fintech) is a double-edged sword. The innovations in fintech have advanced traditional ways of undertaking transactions and provided immense opportunities to individuals and businesses, such as faster and more efficient settlement of payment. However, it has also fueled illegalities such as money laundering, which essentially involves making illegally-gained financial proceeds appear to have legitimate source. This paper will reflect on how technological innovation, particularly cryptocurrencies, digital currencies and fintech solutions enable money laundering; as well as the efforts of international organization (such as the Financial Action Task Fund, the Egmont Group and the Inter-Governmental Action Group against Money Laundering in West Africa) to curb same. It will undertake a comparative analysis of the regulatory actions undertaken in relevant jurisdictions to curb money laundering, specifically, Canada, the United States of America, the United Kingdom and Nigeria. This paper will also highlight the need for anti-money laundering (“AML”) regulators to actively consult with relevant technology stakeholders in order to enact AML regulations which are tailor-made, practical and pre-empt technological advancements. In addition, this paper will argue that since money launderers are ever so creative in their modus operandi, innovative and dynamic technology-based approach should be adopted in tackling money laundering.

Keywords: Technology, Cryptocurrency, Blockchain, Fintech, Innovation, Regulations, AML, Money Laundering

Suggested Citation

Anichebe, Uche, Combating Money Laundering in an Age of Technology and Innovation (August 15, 2020). Available at SSRN: https://ssrn.com/abstract=3627681 or http://dx.doi.org/10.2139/ssrn.3627681

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