The point here gentleman is that anti-money laundering has been a significant issue in the United States for over 34 years.  These laws have also been amended every 2-5 years since 1986 so this issue continues to be of great concern.

Since the creation of the FATF in 1989, 36 countries have come out in support of similar legislation and regulation.

When you look at the liberty reserve case you see that 15 countries were involved in that effort.
http://www.justice.gov/usao/nys/pressconference/libertyreserve/visual.pdf

So when individuals rail about the over-reach of the US government or say they are safe or immune from these laws because they are in other countries they are naively mistaken.

I'm not saying I agree with or support these laws and regulations as the pertain to virtual currencies but it is important we identify and understand the risks.

The laws and potential new  regulation and  "guidance" are clearly a threat to the long term viability of virtual currencies and it is important we understand them in any effort to finda way forward.

Financial Action Task Force
http://www.fatf-gafi.org/pages/aboutus/

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.  The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.  The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.


The FATF currently comprises 34 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe.

Argentina

Australia

Austria

Belgium

Brazil

Canada

China

Denmark

European Commission

Finland

France

Germany

Greece

Gulf Co-operation Council

Hong Kong, China

Iceland

India

Ireland   

Italy

Japan

Republic of Korea 

Luxembourg

Mexico

Netherlands, Kingdom of

New Zealand

Norway

Portugal

Russian Federation

Singapore

South Africa

Spain

Sweden

Switzerland

Turkey

United Kingdom

United States

FATF Associate Members

Asia/Pacific Group on Money Laundering (APG) (See also: APG website)
Caribbean Financial Action Task Force (CFATF) (See also: CFATF website)
Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) (See also: Moneyval website)
Eurasian Group (EAG) (See also: EAG website)
Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) (See also: ESAAMLG website)
Financial Action Task Force on Money Laundering in South America (GAFISUD) (See also:   GAFISUD Website)
Inter Governmental Action Group against Money Laundering in West Africa (GIABA) (See also: GIABA website)
Middle East and North Africa Financial Action Task Force (MENAFATF) (See also: MENAFATF website)

Money laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean." Money laundering can facilitate crimes such as drug trafficking and terrorism, and can adversely impact the global economy.

In its mission to "safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering and other illicit activity," the Financial Crimes Enforcement Network acts as the designated administrator of the Bank Secrecy Act (BSA). The BSA was established in 1970 and has become one of the most important tools in the fight against money laundering. Since then, numerous other laws have enhanced and amended the BSA to provide law enforcement and regulatory agencies with the most effective tools to combat money laundering. An index of anti-money laundering laws since 1970 with their respective requirements and goals are listed below in chronological order.

Bank Secrecy Act (1970)
Established requirements for record keeping and reporting by private individuals, banks and other financial institutions
Designed to help identify the source, volume, and movement of currency and other monetary instruments transported or transmitted into or out of the United States or deposited in financial institutions

Required banks to
(1) report cash transactions over $10,000 using the Currency Transaction Report;
(2) properly identify persons conducting transactions; and
(3) maintain a paper trail by keeping appropriate records of financial transactions

Money Laundering Control Act (1986)
Established money laundering as a federal crime

Prohibited structuring transactions to evade CTR filings
Introduced civil and criminal forfeiture for BSA violations
Directed banks to establish and maintain procedures to ensure and monitor compliance with the reporting and recordkeeping requirements of the BSA

Anti-Drug Abuse Act of 1988
Expanded the definition of financial institution to include businesses such as car dealers and real estate closing personnel and required them to file reports on large currency transactions
Required the verification of identity of purchasers of monetary instruments over $3,000

Annunzio-Wylie Anti-Money Laundering Act (1992)
Strengthened the sanctions for BSA violations
Required Suspicious Activity Reports and eliminated previously used Criminal Referral Forms
Required verification and recordkeeping for wire transfers
Established the Bank Secrecy Act Advisory Group (BSAAG)

Money Laundering Suppression Act (1994)
Required banking agencies to review and enhance training, and develop anti-money laundering examination procedures
Required banking agencies to review and enhance procedures for referring cases to appropriate law enforcement agencies
Streamlined CTR exemption process
Required each Money Services Business (MSB) to be registered by an owner or controlling person of the MSB
Required every MSB to maintain a list of businesses authorized to act as agents in connection with the financial services offered by the MSB
Made operating an unregistered MSB a federal crime
Recommended that states adopt uniform laws applicable to MSBs

Money Laundering and Financial Crimes Strategy Act (1998)
Required banking agencies to develop anti-money laundering training for examiners
Required the Department of the Treasury and other agencies to develop a National Money Laundering Strategy
Created the High Intensity Money Laundering and Related Financial Crime Area (HIFCA) Task Forces to concentrate law enforcement efforts at the federal, state and local levels in zones where money laundering is prevalent. HIFCAs may be defined geographically or they can also be created to address money laundering in an industry sector, a financial institution, or group of financial institutions.

Uniting and Strengthening America by Providing Appropriate Tools to Restrict, Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act)
[Title III of the USA PATRIOT Act is referred to as the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001]
Criminalized the financing of terrorism and augmented the existing BSA framework by strengthening customer identification procedures
Prohibited financial institutions from engaging in business with foreign shell banks
Required financial institutions to have due diligence procedures (and enhanced due diligence procedures for foreign correspondent and private banking accounts)
Improved information sharing between financial institutions and the U.S. government by requiring government-institution information sharing and voluntary information sharing among financial institutions
Expanded the anti-money laundering program requirements to all financial institutions
Increased civil and criminal penalties for money laundering
Provided the Secretary of the Treasury with the authority to impose "special measures" on jurisdictions, institutions, or transactions that are of "primary money laundering concern"
Facilitated records access and required banks to respond to regulatory requests for information within 120 hours
Required federal banking agencies to consider a bank's AML record when reviewing bank mergers, acquisitions, and other applications for business combinations

Intelligence Reform & Terrorism Prevention Act of 2004
Amended the BSA to require the Secretary of the Treasury to prescribe regulations requiring certain financial institutions to report cross-border electronic transmittals of funds, if the Secretary determines that such reporting is "reasonably necessary" to aid in the fight against money laundering and terrorist financing

Excellent. Now lets get this phrase posted and reblogged all over the Internet.

cool.  I'll have to try it.  Have not used them in a while.

Hiding in the basement can have that effect.

This is Bitcoin. I don't believe anything until I see 6 confirmations.

WOW. Pressure must be getting to him. Now he is beating the wife. Life sucks when the tables turn.

Juan Llanos is the co-founder, EVP and Compliance Officer of Unidos Financial Services, Inc., an innovative financial services and technology provider catering to merchants and under-banked end consumers in the US.

He gave one of the best compliance overviews I've have seen.

http://www.slideshare.net/juanbllanos/2013-0814-new-york-presentation-vccc

If you operate a bitcoin business in the US or serve clients in the US you MUST be aware of these regulation and requirement as they apply to your business.

Juan also blogs on compliance issues at http://contrariancompliance.com/

Zach was the tech guy/coder. Trendon is about as good at coding as he is at day trading..

Waiting for permission to post slides.

negatory

Amazing.  One the of the best I've attended. 

Bad news guys.

Sorry, not signed in.  Signing in now.

are you kidding me??

This guy though he was "anonymous"

http://nymag.com/news/features/lulzsec-sabu-2012-6/

and this guy


http://www.forbes.com/sites/andygreenberg/2013/05/28/anonymous-hacker-jeremy-hammond-pleads-guilty-to-stratfor-hack-could-face-10-years-in-prison/

and this guy


http://www.mirror.co.uk/news/uk-news/anonymous-hackers-christopher-weatherhead-aka-1554188

FlipPro

What is the Bitcoin Business Alliance and who are they??

So when the illicit activity you my be perpetrating with the anonymous google voice account is investigated, the person who confirmed the code for you will also be complicit.  Nice.

Francine McKenna, Contributor
PERSONAL FINANCE
|
 
6/21/2013 @ 11:35AM |5,344 views
Deloitte By Any Name Won't Be Monitoring NY Banks For A While

When the Superintendent of the New York State Department of Financial Services, Benjamin Lawsky, said he was going to hammer on a banking consultant, many thought the nail might be ultra-connected Gene Ludwig’s Promontory Financial Services. After all, it was Promontory that pooh-poohed the bad conduct at Standard Chartered, estimating it at mere millions instead of hundreds of billions.
Instead Lawsky banged on Big Four auditor Deloitte’s Financial Advisory Services business unit. DFS fined the firm $10 million this week and banned Deloitte from accepting new consulting engagements at financial institutions regulated by Lawsky. Deloitte’s violations took place while standing in the shoes of the regulator as a “monitor” at Standard Chartered. The original Deloitte engagement was the result of a 2004 joint written agreement between Standard Chartered and the New York State Banking Department – a DFS predecessor agency – and the Federal Reserve Bank of New York which identified several compliance and risk management deficiencies in the anti-money laundering and Bank Secrecy Act controls at Standard Chartered’s New York branch.
The order addresses Deloitte’s “misconduct, violations of law, and lack of autonomy during its consulting work” at Standard Chartered Bank on those anti-money laundering (AML) issues.

From a press release from New York Governor Cuomo’s office:
DFS’s investigation into the conduct of firm professionals during its consulting work at Standard Chartered found that Deloitte:
Did not demonstrate the necessary autonomy required of consultants performing regulatory work. Based primarily on Standard Chartered’s objection, Deloitte removed a recommendation aimed at rooting out money laundering from its written final report on the matter to the Department. The recommendation discussed how wire messages or “cover payments” on transactions could be manipulated by banks to evade money laundering controls on U.S. dollar clearing activities.

Violated New York Banking Law § 36.10 by disclosing confidential information of other Deloitte clients to Standard Chartered. A senior Deloitte employee sent emails to Standard Chartered employees containing two reports on anti-money laundering issues at other Deloitte client banks. Both reports contained confidential supervisory information, which Deloitte FAS was legally barred by New York Banking Law § 36.10 from disclosing to third parties.

Oof!
American Banker’s Chris Cumming quotes mewhile describing the impact of this enforcement action.

More significant is the precedent Lawsky has set. It could be “very disruptive” for banks if other states, following New York’s lead, ban consultants from operating and issue their own sets of regulations, says Francine McKenna, an accounting watchdog and journalist who has contributed to American Banker‘s BankThink columns.

“Banks will have to have a contingency plan if suddenly a very significant consultant stops working,” she says.

Even though the New York sanctions on Deloitte would only apply to state-chartered banks, they could have a spillover effect in terms of industry-wide reputational risk. Some consultants expect to see big national banks — especially those already under regulatory scrutiny — also rethinking their use of the firm.

Deloitte’s law-breaking at Standard Chartered probably made officials at the Federal Reserve Bank of New York particularly uncomfortable. Deloitte’s audit arm is the financial auditor for the entire Federal Reserve system, and Deloitte also audits some of the firms the Fed has been highly dependent on during and after the crisis such as BlackRock. Deloitte’s actions at Standard Chartered belied its intended role as the eyes and ears of the Fed and DFS, making sure Standard Chartered corrected its money laundering ways. Instead, Deloitte helped Standard Chartered assuage regulator concerns by breaking the law and sharing confidential regulatory information with the bank from its other “monitor” engagements.

Deloitte has been working on a similar engagement to correct AML violations at the nationally chartered US operations of HSBC Holdings PLC in New Castle, Delaware, where the firm is again acting at the behest of the feds. The HSBC engagement is a “look-back” at thousands of old transactions ordered by the OCC in 2010 when the regulator cited the bank for multiple anti-money laundering failures. According to Reuters last year, it was not going well.

The New Castle look-back, overseen by consultants Deloitte LLP, was manned by more than 100 former law-enforcement officials, bank examiners and others. Many of them were working under contract with outside anti-money laundering consulting firms…In the HSBC look-back, one contractor said, many suspicious cases were “buried.” In one case, the contractor wanted to find out why 13 parties had wired a total of $1.3 million into an HSBC account in Hong Kong on the same day. He said that when he asked a Deloitte supervisor to request that the Hong Kong office provide information about the customer, he was told that decision rested with the HSBC manager in charge of the account. The information never was provided, and the same contractor said he was later fired for not clearing enough alerts.
The look-back team held brief weekly meetings at which Deloitte overseers ticked off how many cases had been cleared and complained about delays. Several contractors said that investigators deemed slow on the job were fired.
Similar allegations  - that Deloitte seems more eager to please a bank involved in a regulatory action rather than stand tough as the proxy for the regulator  - recently surfaced at Lloyds Bank in the UK. That engagement addressed customer claims processing for payment protection insurance (PPI), designed to cover loan repayments for debtors who became ill, had an accident or lost their jobs.
PPI was mis-sold by UK banks on a massive scale to customers who did not want or need it. According to the London Evening Standard, Lloyds – the biggest PPI seller in the UK  – was fined £4.3 million by the Financial Services Authority for not settling PPI claims promptly.

From the London Evening Standard on June 11:
Lloyds Banking Group has admitted “issues” in the handling of PPI complaints and fired Deloitte which operated the unit.
It comes as an undercover reporter on The Times claimed that when he went through the training procedure to join the PPI complaint centre at Royal Mint Court he saw staff taught how to “play the system” against customers.

This included turning a blind eye to the risk that fraud may have been committed and knowing that most customers gave up if their complaint was rejected first time around.
Most of the headlines for news stories about Deloitte FAS’s agreement with DFS regarding Standard Chartered referred simply to “Deloitte”. Deloitte spokesman Jonathan Gandal tried to make the distinction in the firm’s official statement:
Deloitte FAS looks forward to working constructively with DFS to establish best practices and procedures that are ultimately intended to become the industry standard for all independent consulting engagements under DFS’ supervision.

It is important to note that, as the agreement also states: “This is not intended to affect engagements performed by any Deloitte entity other than Deloitte FAS.  Neither the fact of this agreement nor any of its terms is intended to be, or should be construed as, a reflection of any of the other practices of Deloitte-affiliated entities.”

However, Deloitte itself says on its global website:
“Deloitte” is the brand under which nearly 200,000 professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory,risk management, and tax services to selected clients.

Can’t have it both ways.
So it’s not too surprising that the public, and even regulators, legislators, and some journalists are often confused about the difference between Deloitte LLP the audit firm, Deloitte Consulting the consulting firm (not to be confused with Deloitte FAS LLP a different consulting firm), and Deloitte the tax advisory firm when one of them gets into trouble. It’s also hard to separate the Deloitte global member firms such as Deloitte’s China firm when it’s sued or sanctioned for Chinese reverse merger fraud and refuses to cooperate with the US regulators from Deloitte Touche Tohmatsu the global “coordinating” firm and then from the Deloitte US firms. The Big Four audit firms look more and more like any other multinational corporation hiding behind myriad separate legal entities rather than global professional services partnerships providing “seamless” service delivery.

Reputation risk doesn’t seem to get in the way anymore of audit firms helping some criminal banks do lots of illegal things. That’s what I said when DFS first made the allegations against Deloitte in August of last year.
“Reputation risk” is now an oxymoron. Bankers and their enablers, the audit firms, have no risk to their reputation from anyone that matters. They are both repeatedly the subject of settlements, consent decrees, non-prosecution agreements, cease and desist orders and the rest of the regulator arsenal. They keep profiting and repeating their crimes with impunity.
That’s what I warned about when Deloitte was awarded the “independent” consultant role at JP Morgan Chase, performing the “look back” review required by the OCC/Fed consent decrees signed with a dozen banks in April of 2011 as a result of foreclosure abuses. Deloittehas an even bigger incentive to cheat and look out for JPM Chase and itself on that engagement, rather than borrowers who were cheated by the bank. Most of the foreclosures Deloitte is “independently” reviewing are based on mortgages acquired by JPM from Bear Stearns and Washington Mutual, two of Deloitte’s audit clients before those institutions failed and were taken over by JPM.

I wondered out loud to NY DFS spokesman Matt Anderson, “How does DFS plan to make sure Deloitte, and the banks, don’t circumvent the ban by shifting Deloitte FAS staff to other Deloitte entities and running new engagements through them?”

Anderson reassured me. “DFS has the ability to monitor compliance since it controls access to confidential supervisory information under its 36.10 authority. They can’t access the information without our approval. The road runs through our agency.”

Benjamin Lawsky and the NY DFS team are on it. Let’s hope federal and state regulators in the US and international regulators follow that lead with similar tough actions against all the various forms, and firms, used by the Deloitte and its fellow Big Four enablers – PwC, KPMG and Ernst & Young.
Deloitte provided its full official statement, a portion of which was reproduced above, in response to my request for comment.

Lawsky has been in the news before:

Ben Lawsky's Moment: Financial World Pounces on Standard Chartered Regulator

Reuters


JOHN HUDSON 719 ViewsAUG 15, 2012
Nine days ago Ben Lawsky was a no-name financial regulator working for the state of New York, but now he's the front page protagonist behind the largest money laundering settlement in U.S. history. On Tuesday, the 42-year-old superintendent of financial services announced the $340 million payment by Standard Chartered, the British mega bank that allegedly laundered some $250 billion of Iranian money. Those charges, leveled at the bank eight days ago, came out of nowhere, but equally surprising was Lawsky's lightning-fast settlement of the case, which The New York Daily News championed as "quick and effective." "Bravo to state Financial Services Superintendent Ben Lawsky," added the tabloid. But despite the impressive haul for the one-year-old state agency, the man has quickly made enemies with powerful U.S. and European regulators and some of  the biggest voices in financial journalism. Here's how Lawsky's opponents are trying to take down New York's rising star regulator after his huge cash haul on Tuesday:

He jumped the gun. Lawsky's agency wasn't the only regulator looking into Standard Chartered's questionable dealings with Iran prior to last week's charges. According to reports, regulators including the U.S. Treasury, the Federal Reserve, the Justice Department and the Manhattan District Attorney were also involved in the matter. But in pursuing his go-it-alone strategy, Lawsky infuriated the feds and may have complicated forthcoming investigations and settlements, a former prosecutor tells Bloomberg. “Ben Lawsky hijacked the feds’ case,” says Rita Glavin, currently an attorney at Seward & Kissel LLP. “That kind of move causes a major headache for the Justice Department. Before, they may have been more willing to share with a state regulator. They may not be so willing in the future.”  While that may be true, The New York Times' Jessica Silver-Greenberg reports that its unclear if the feds would've pounced if Lawsky hadn't. "In the weeks leading up to Mr. Lawsky’s move against the bank, the Justice Department was on the brink of deciding not to pursue criminal charges, after concluding that virtually all of the transactions with Iran had complied with United States law, current and former authorities said." Either way, feathers were clearly ruffled.

He played fast and loose with the facts. In today's paper, The Wall Street Journal's editorial board makes a piercing assessment of Lawsky's conduct in the case. "His grandstanding on Standard Chartered may also do more harm than good. For one thing, his declaration of allegations includes some exaggerated facts. Of the $250 billion of transactions at issue, it now appears that $249 billion and change were legal at the time they occurred," writes the newspaper. "We're told by other law enforcers that roughly $300 million in transactions over the course of a decade were illegal. This is higher than the bank's public claim of only $14 million, but a tiny fraction of the amount in Mr. Lawsky's initial accusation. So far the illegal transactions also don't appear to have had any ties to terror or weapons." Pushing back against the Journal, blogger Yves Smith called it an "alternative reality editorial," noting that both "parties have agreed that the conduct at issue involved transactions of at least $250 billion."

He sacrificed the truth for a headline. CNN Money's Larry Doyle says a hasty fine settlement could prevent us from uncovering the actual misdeeds of Standard Chartered. "The last thing I want to see is a fine. Better that Standard Chartered pays not a penny than we suffer again from not truly knowing and learning the truth. A fine only serves to suffocate the truth," he writes, calling for an independent investigation. "When a bank is merely fined for dealing with a rogue nation such as Iran, that payment is nothing more than blood money. A fine does not rebuild confidence but erodes it dramatically because the public is aware that the truth remains under wraps. What rebuilds confidence? The truth. If the truth exposes ugly practices within Standard Chartered and similarly lax oversight from regulators, then so be it... In delivering the truth, the public and our global economy will be reinvigorated by fresh air filling our collective lungs."

It was a publicity stunt. In an interesting window into the world of competing global regulators, it appears Lawsky's peers aren't big fans of his alleged grandstanding. "Lawsky’s order angered U.K. officials, who viewed it as an attack on London’s status as a financial center," Bloomberg's Greg Farrell and Tiffany Kary report. "In the U.S., regulators including the Treasury Department, the Federal Reserve and the Manhattan District Attorney complained privately in published reports that Lawsky’s order was a publicity stunt that disrupted their own probes of the matter."

Want to add to this story? Let us know in comments or send an email to the author at jhudson@theatlantic.com. You can share ideas for stories on the Open Wire.