Compliance Institute Southern Africa

How to determine the source of funds in crypto In every anti-money laundering (AML) regulation, obliged entities are required to determine the source of funds or source of wealth in specific situations and always in the case of high-risk customers. Things are even more challenging when we are talking about determining the source of funds or wealth in crypto. Why? Because blockchain is public ledger with pseudonymous addresses. Tracing the source of funds is more challenging than in traditional banking. Here are some best practices on how to determine the source of funds in crypto: ✅ Financial/Bank Statements: Funds to be used for crypto purchase often originate from traditional financial institutions (FI) and go to centralized exchanges. If this is what the customer says, you will be able to see the transaction in any financial/bank statement. Cash purchases pose a greater challenge. In such cases, review cash withdrawal details on the statement. ✅ Service Provider Documentation: Service providers like cryptocurrency exchanges and P2P platforms act as intermediaries. They keep detailed records of transactions, including the source of the funds deposited by their customers. Such records can provide an explanation for the source of funds. ✅ Mining Activity: Customers involved in mining pools can provide payout history for the establishment of the source of funds. For solo miners, request equipment purchase receipts and utility bills reflecting high electricity consumption. This can often justify the customer's claim that the funds are proceeds of mining. ✅ Employment Contracts: Some professionals receive crypto payments for consulting or marketing services. Employment agreements typically outline payment details. Such contracts or proof of payments may be sufficient in some cases. What other methods do you use to establish the source of funds in crypto? #crypto #aml

The Information Regulator is tackling the issue of unsolicited spam calling in South Africa by slapping offenders with enforcement notices, which carry hefty fines if not adhered to. https://lnkd.in/dvESvnRH

#SA should continue a policy that will grow its #investment links with both the US and China, says Standard Bank Group CEO. #Moneyweb https://ow.ly/tpJs50SawsK

UK Banks and asset managers are warned about greenwashing claims on their products. SA entities will do well to take heed of these requirements. https://lnkd.in/dTiwRXMg

🚨 BREAKING: Singapore releases the report "Model Al Governance Framework for Generative Al - Fostering a Trusted Ecosystem," and it's a must-read for everyone interested in AI policy & regulation. Important information: ➡ The report outlines 9 dimensions to "create a trusted environment – one that enables end-users to use Generative AI confidently and safely, while allowing space for cutting-edge innovation." These are the 9 dimensions: ➵ Accountability ➵ Data ➵ Trusted Development and Deployment ➵ Incident Reporting ➵ Testing and Assurance ➵ Security ➵ Content Provenance ➵ Safety and Alignment R&D ➵ AI for Public Good ➡ Interesting quotes: "Responsibility can be allocated based on the level of control that each stakeholder has in the generative AI development chain, so that the able party takes necessary action to protect end-users. As a reference, while there may be various stakeholders in the development chain, the cloud industry7 has built and codified comprehensive shared responsibility models over time. The objective is to ensure overall security of the cloud environment. These models allocate responsibility by explaining the controls and measures that cloud service providers (who provide the base infrastructure layer) and their customers (who host applications on the layer above)respectively undertake." (page 7) - "There is, therefore, a need to work with key parties in the content life cycle, such as working with publishers to support the embedding and display of digital watermarks and provenance details. As most digital content is consumed through social media platforms, browsers, or media outlets, publishers’ support is critical to provide end users with the ability to verify content authenticity across various channels. There is also a need to ensure proper and secure implementation to circumvent bad actors trying to exploit it in any way." (page 25) - "Industry, governments, and educational institutions can work together to redesign jobs and provide upskilling opportunities for workers. As organisations adopt enterprise generative AI solutions, they can also develop dedicated training programmes for their employees. This will enable them to navigate the transitions in their jobs and enjoy the benefits which result from job transformations" (page 30) ➡ Read the full report below ➡ To stay up to date with the latest developments in AI policy & regulation, subscribe to my newsletter. #AIGovernance #AIpolicy #GenerativeAI #AIregulation #AI #Singapore