Canada’s FINTRAC updates its anti-money laundering (AML) strategies, with a particular emphasis on the role of cryptocurrency in the prevention of synthetic opioid-related money laundering.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has issued an alert that emphasizes the role of cryptocurrencies in the laundering of proceeds from synthetic fentanyl and opioid trafficking.
On January 23, FINTRAC, the national financial intelligence agency of Canada, released new client risk factors and indicators of synthetic opioid trafficking and production in order to combat the laundering of illicit funds associated with the nation’s drug problem.
FINTRAC’s alert, “Laundering the Proceeds of Illicit Synthetic Opioids,” is an update to a 2018 version that incorporates new risk factors derived from analyses of financial intelligence, transactions, publications, and law enforcement reports.
In an effort to assist law enforcement agencies in enhancing their vigilance within the crypto sector, FINTRAC identified numerous red flags that underscore the growing role of cryptocurrency in the laundering of illicit gains from synthetic opioid sales.
These comprised substantial crypto-to-fiat conversions that necessitated the establishment of new accounts and the utilization of multiple virtual wallets to conceal the origins of transactions prior to their international transfer or cashout.
Additionally, the agencies were requested to monitor deposits into cryptocurrency exchanges from accounts associated with high-risk regions or that had been previously identified as dubious.
This alert is a result of Project Guardian, a public-private partnership that encompasses financial institutions, law enforcement agencies, and international stakeholders, and is consistent with Canada’s involvement in the North American Drug Dialogue.
The Canadian Imperial Bank of Commerce (CIBC) initiated Project Guardian in 2018 with the objective of combating synthetic opioid-related money laundering. This initiative is unrelated to the Project Guardian initiative of the Monetary Authority of Singapore.
FINTRAC also encouraged financial institutions and virtual asset service providers (VASPs) to incorporate these new risk factors into their Anti-Money Laundering (AML) strategies.
The agency emphasized the necessity of collaboration within the crypto ecosystem to ensure that financial institutions, regulators, and VASPs are prepared to detect and combat money laundering associated with the drug trade.
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