The spate of scrutiny in the crypto industry has intensified as findings of the Pandora Papers publication continue to fill the diplomatic and political space.
The crypto sector and fintech firms are receiving more attention, as the papers mentioned the involvement of some crypto-based companies.
The timing of the Pandora Papers publication is coming during the publication of EU’s AMLA Regulatory Framework and the implementation of 6 AMLD (the Sixth Anti-Money Laundering Directive)
The AMLA, which is the new anti-money laundering regulatory framework of the European Union, is strongly being used to check fraudulent activities in the industry.
And the revelations in the papers are bringing many companies in the crypto sector under scrutiny.
Any company flagged by the publication of the papers will have their access to their banking solution blocked. This is because the risk committee will be seriously scrutinizing all activities the company has engaged in.
More Scrutiny In The Crypto Industry
The revelations in the Pandora Papers show the offshore deals and assets of over 300 public officials, 30 world leaders, and 100 billionaires.
It has already become the largest trove of leaked offshore data in history, as it reveals the secret deals of some of the most powerful and richest people in the world.
The cache contains 11.9 million papers from firms hired by rich clients to create offshore trusts and structures in tax havens such as Cayman Islands, Switzerland, Monaco, Dubai, and Panama.
As a result, the financial world is now under strict scrutiny. Before the revelation, the crypto sector has been receiving a lot of backlash for its openness to fraud and financial crimes. Now, after the revelation in the Pandora Papers involving some crypto-based firms, the industry will be facing more assessment regulators around the world.
Institutions Reassess Their Risks
Banks and other financial institutions are now being accessed as the issue of risk appetite for the institutions is at stake. The financial institutions already indicted will be faced with several challenges.
The EU is now pushing speedily for the implementation of 6 AMLD for each member state. Banks are still not sure how they would handle their operations with the indicted financial institutions. But the implementation of the AMLA and 6 AMLD will provide a clear point of risk assessment in the industry.
