Following the money laundering red flag indicator guidelines set out by the FATF is a good place to start.

Red flag indicators related to transactions can involve payments that are made in small amounts, or in repeated quantities that fall under a reporting threshold. Alarm bells can also be raised if funds are sent to a newly created or previously inactive account.

Transaction patterns can also rouse suspicion — especially if the deposits made are inconsistent with a customer’s profile.

Other indicators can concern senders and recipients, irregularities when it comes to the source of funds or wealth, and suspicious circumstances related to geography — such as if a customer’s funds originate from, or are sent to, an exchange “that is not registered in the jurisdiction where either the customer or the exchange is located.”

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These guidelines are detailed and comprehensive — and come complete with case studies that powerfully illustrate the types of scenarios that financial institutions should be looking for.


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How banks can identify money laundering involving crypto, explained

by Cameryn Gollakner
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