Anti-Money Laundering Techniques for Real Estate Business and Virtual Currency based transactions

Table of Contents

1. Real estate agents should be subjected to the comprehensive Anti-Money Laundering Regulations in Australia: 1

2. Roles of criminals to abuse cryptocurrency: 2

References 5

1. Real estate agents should be subjected to the comprehensive Anti-Money Laundering Regulations in Australia:

AUSTRAC binds strategic Anti-Money Laundering frameworks that refer to sustainable analysis and requisite briefs which in turn provide governmental insights regarding the real estate industry about illicit techniques that involve money laundering issues and risks, trends and methods pertaining to terrorism financing. The key purpose is to provide information that would help resist methods and strategies regarding money laundering methods with indicators pointing out vulnerabilities associated with money misfits through real estate business in Australia. These binding frameworks create an associated norm between Regulated entities and Real Estate transactions. [CITATION Dav19 l 1033 ]

The acquisition of illicitly acquired funds create a complete different and ambiguous channel of funds and transactions in real estate businesses in Australia. The very point where this illicit transaction intersects with the money laundering, Anti-Money Laundering Law through real estate is identified. Criminals buy goods of high evaluation such as real estate as a technique of laundering or covering black money. They use illicit funds through a significant money laundering channel which enables them with the ability to buy real estate using cash, disguise the ultimate financial ownership. Real estate agents are subjected to create real estate transactions that commonly go through a financial institution like a loan, deposit, or withdrawal. These practice methods recommend the use of conveyancers and other property professionals to take intermediate steps in order to verify the identity of the client and confirm the client’s authority regarding instructions with dealing with financial property. [CITATION Dav19 l 1033 ]

Several methods enlisted under money laundering techniques are a combination of domestic and international fund transactions through illicit means thereby causing intervention in the anti-money laundering framework. The use of a third-party member or a family member to acquire property by depositing or withdrawing funds through a third-party account is considered as a money laundering method. Provision of fake employment and income documentation to financial institutions in support of loans and mortgages count under lump some cash repayments, another money laundering technique. Undervaluation and overvaluation in order to obtain a financial property is also an illicit fund flow technique. Reselling property in quick successions in order to confuse the audit board is another policy the miscreants use. Structuring of cash deposits in order to buy real estate cover illicit funds to cover rent payments and purchase of real estate to conduct criminal activity like cultivating cannabis-producing synthetic drugs fall under money laundering methods.[ CITATION aus19 l 1033 ]

Use of professional facilitators like agents, conveyancer or solicitor in the process of buying real estate is considered money laundering. These professional facilitators are called gatekeepers because these individuals create an establishment through which an efficient gateway for illicit fund transaction can be created. In many of the cases, such establishment counter to the introduction of criminals into financial institutions, transaction of large amount of cash, introduction of complex lands and other credit arrangements. Indicators are used to identify potential money laundering with a valid chart of points being ticked off to create a converging case of suspicion including potential points of illicit activity. [ CITATION MSz16 l 1033 ]

Criminals will continue to use real estate opportunities as a potential money laundering resource to facilitate and mitigate illicit cash whenever necessary. Since the real estate business is booming in Australia with a rapid increase in capitalization and money inflow providing a decree of persistent visibility, money laundering needs to be counter-controlled. The Ant-Money Laundering Law would be a very accurate provision to AUSTRAC in order to maintain a reliable provider that obstructs the illegal financial and criminal activity concerned with the same. AML/CTF sector should further strengthen its regulations in order to rapidly indicate discrepancy and reiterate them likewise.

2. Roles of criminals to abuse cryptocurrency:

Math based virtual currencies like Bitcoin have delivered a new way of garnering financial strategies in terms of virtual payment systems and have incorporated new indices in terms of investment and returns. While the understanding of such monetary facilitation is still unclear, different bypass methods related to cheating and fraud have been discovered. With the advent of this payment system, related to virtual currencies, the surrounding fraudulent activities including terrorism financing, internet-based frauds, have considerably increased. Anonymizing tools that are easily available in portfolios like darknets and mixers are considered as a potential source responsible for hiding the foundation of these transactions. (Anon., 2010)

Virtual currency systems have an exchanger which is typically a person or service engaged in the form of a business, responsible for transacting real denominations in exchange for virtual currencies. While some criminal activities have eroded the process of transactions, others have eroded the technological growth through virtual currencies. These illicit incidents have been terminated by the potential intervention of the Financial Action Task Force, as an independent inter-governmental body that helps in developing and promoting guidelines against the production of global financial systems that exhibit criminal dimensions. The initial address regarding virtual currencies did not mention the clear point of separation between the internet-based payment systems and virtual currency. The later work in the similar areas provided with objectives that started developing ideas supported by topological projects and were concerned about developing risk Matrix for virtual currencies. These declined atrocities and guided a say way of payment that works on virtual currencies and stimulate discussions on implementing better regulations to reduce fraud considerably over time. (Anon., 2019)

The virtual currencies have created a mixed reaction to end-users who do not have a concealed understanding of the coding inscribed into its development. On the other hand, the fraudulent activities over the web have taken a rise in facts and figures post the feasibility of exchangers that convert virtual currencies to actual currency and vice versa. With the increase in the number of feasible technologies that are used up in making adaptations that create guiding factors behind a type of cryptocurrency, the resultant inductors have thrown light on mitigating the risks with proper analysis and security. Thus, the maximum toll of errors or bugs generated through the unlawful interception of virtual currencies has created a layer of miscreants who drive in profits through dark web and mixers, as discussed above.  This is a grave concern taking into account the amount of transaction that is processed through this channel. Theft occurring regularly across the web using Central virtual currencies made it mandatory for the Government to create a single administrative unit that would restrict and control the processing system with the help of a third-party investigator. (TAKAHASHI, 2019)

Cryptocurrencies or decentralized virtual currencies are completely open-source, math test operated, the peer-to-peer virtual currency that is programmed to develop and can induce a sense of distributed information economy. Thus, the way of development for the cryptocurrency has to be suitably enhanced in a way that the guiding parameters are stringent with respect to laws concerned with the same and any violation should be made liable to strict action. Even though Cryptocurrencies provide a new medium for financial interaction between independent parties, it has often led to severe risks in the recent past. The issues pertaining to such risks were coveted and highly ciphered at times, making it tough for white-hat hackers to restore processes to normal and reduce contaminations from dark web. With risks amounting to a hefty number, the requisite parameters for safety and protection of actual currency have considerably increased over time. While a newer method of the transaction would be a resource for mankind, explicit and uncontrolled use of the same would result in terminal issues.

References

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Available at: https://ngm.com.au/austrac-regulatory-approach/

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TAKAHASHI,D.,2019.venturebeat.[Online]
Available at: https://venturebeat.com/2019/04/30/cryptocurrency-thefts-scams-and-fraud-top-1-2-billion-in-q1/