A risk assessment report released by the Financial Information Unit (FIU) found banks more vulnerable to money laundering and terrorist financing risks than cryptocurrencies, Business Korea reported.
The division of South Korea’s Financial Services Commission researched its domestic financial sector, which includes banks, securities companies, insurers, mutual financing companies, credit card services, and even crypto exchanges. After a thorough assessment, it found that while banks had better systems to repel money laundering and terrorist financing activities, they were yet more exposed to them than any other financial business.
“The banks have better systems against money laundering and terrorist financing than other financial companies,” the study revealed. “Yet the former’s vulnerability is higher due to the larger size of the banking sector and the innate characteristics of their products and services like trade financing, cash management service, and forex trading.”
At the same time, the FIU study noted that transactions involving cash and cryptocurrencies are also vulnerable to the same criminal activities, but cryptos mainly are less likely to be used for terrorist financing.
“The anonymity of cryptocurrency trading hinders tracking, and criminals can take advantage of it,” FIU found. “The same applies to cash dealing as large-denomination bills rarely return.”
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The report of the South Korean financial regulator finds similarities in what Europol said in its Intenet Organized Threat Assessment 2018 report. The 72-page long study also
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