Transparency International report exposes potential money laundering loophole

Verified accounts for Wirex, a well-established app for transferring cryptocurrencies to fiat money, are being offered for sale on the black market, a news report by Transparency International Russia has found.

A verified account with the app registered to an EU or Ukrainian national could potentially be used to transfer money from Russia to the European Union anonymously.

To confirm the availability of verified accounts, Transparency contacted some of the sellers posing as a potential buyer. Prices varied from $30 (€28) for an account registered to a Ukrainian citizen to $220 (€206) for an account in the name of a Czech national. The sellers also said that photo or video proof of identity could be provided by the account holder if necessary.

Given the dozens of accounts being sold by each seller, it would theoretically be possible to transfer large sums of money by splitting it up into multiple smaller transactions to avoid suspicious activity detection.

Although Wirex is a UK-based holding company and is regulated as an electronic money institution by the UK’s Financial Conduct Authority, its operations span multiple jurisdictions with different legal entities, and its key crypto-related payment services in the UK and the European Economic Area are being routed through Croatia, according to the report.

Transparency International Russia stressed that it wasn’t alleging that Wirex was “knowingly laundering the proceeds of crime, or failing its legal obligations to report suspicious activity to relevant law enforcement agencies”, but did argue that the report’s findings “justified the increased scrutiny of Wirex’s operations” by anti-money laundering agencies in the UK and EU”.

Earlier this month, Transparency International Russia announced it had dissolved its legal entity in Russia following the government’s decision to deem its Berlin-based parent company, Transparency International, an “undesirable organisation” on 6 March. Any organisation with such a designation is legally compelled to cease all operations in Russia and to dissolve itself.

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