Trends in Security Information
The HSD Trendmonitor is designed to provide access to relevant content on various subjects in the safety and security domain, to identify relevant developments and to connect knowledge and organisations. The safety and security domain encompasses a vast number of subjects. Four relevant taxonomies (type of threat or opportunity, victim, source of threat and domain of application) have been constructed in order to visualize all of these subjects. The taxonomies and related category descriptions have been carefully composed according to other taxonomies, European and international standards and our own expertise.
In order to identify safety and security related trends, relevant reports and HSD news articles are continuously scanned, analysed and classified by hand according to the four taxonomies. This results in a wide array of observations, which we call ‘Trend Snippets’. Multiple Trend Snippets combined can provide insights into safety and security trends. The size of the circles shows the relative weight of the topic, the filters can be used to further select the most relevant content for you. If you have an addition, question or remark, drop us a line at info@securitydelta.nl.
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Initiatives from The Netherlands and Singapore for combating financial crimes
Transaction Monitoring Nederland
TMNL stands for Transaction Monitoring Netherlands, a joint initiative by five Dutch banks: ABN AMRO, ING, Rabobank, Triodos Bank, and de Volksbank. TMNL provides a platform for these banks to collectively monitor their payment transactions for signals that could indicate money laundering or flow of criminal funds. Collective transaction monitoring improves the odds of detecting criminal money flows and networks. The banks would still be required to monitor their own transactions independently, in accordance with their obligations under Dutch anti-money laundering legislation (the Anti-Money Laundering and Anti-Terrorist Financing Act, or ‘Wwft’).
FinTech Regulatory Sandbox Singapore
The FinTech Regulatory Sandbox enables financial institutions and FinTech players to experiment with innovative financial products or services in a live environment but within a well-defined space and duration.
Depending on the experiment, the Money Authority of Singapore (MAS) provides the appropriate regulatory support by relaxing specific legal and regulatory requirements prescribed by MAS that the entity otherwise would be subject to, for the duration of the sandbox.
The sandbox includes appropriate safeguards to maintain the overall safety and soundness of the financial system, facilitating the gathering of insights and practical experience in mitigating “real world” risks. Upon successful experimentation and on exiting the sandbox, the sandbox entity must fully comply with the relevant legal and regulatory requirements.
Takedown of Bestmixer.io
On 22 May 2019, the Fiscal Information and Investigation Service (FIOD) and the Public Prosecution Service took one of the largest online mixers for cryptocurrencies, Bestmixer.io, offline. This operation dealt a severe blow to efforts to conceal criminal money flows through the use of coin mixers. Six operational servers were dismantled and seized in the Netherlands and Luxembourg.
The investigation was conducted in close cooperation with the Dutch Digital Intrusion Team (DIGIT), Europol, and the authorities in Luxembourg, France, and Latvia. In June 2018, the Financial Advanced Cyber Team (FACT) of the FIOD commenced the investigation under the supervision of the National PublicProsecutor’s Office for Serious Fraud and Environmental Crime and Asset Confiscation, acting upon a report from cyber security company McAfee.
The investigation gathered information pertaining to transactions between customers and Bestmixer.io. The customers were from all over the world, especially the US, Germany, and the Netherlands. The FIOD analysed the information together with Europol, thereafter sharing their findings with other countries as appropriate.
Virtual Assets Red Flag Indicators
Virtual assets use innovative technology to swiftly transfer value around the world and have many potential benefits, including making payments faster and cheaper. But the anonymity associated with them also attracts criminals, who have used virtual assets to launder proceeds from a range of offences such as the drugs trade, illegal arms smuggling, fraud, tax evasion, cyber-attacks, sanctions evasion, child exploitation, and human trafficking.
In response, the FATF Report on Virtual Assets - Red Flag Indicators of Money Laundering and Terrorist Financing will help national authorities detect whether virtual assets are being used for criminal activity. Based on more than 100 case studies collected by members of the FATF Global Network, it highlights the most important red flag indicators that could suggest criminal behaviour. Key indicators in this report focus on:
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Technological features that increase anonymity - such as the use of peer-to-peer exchanges websites, mixing or tumbling services or anonymity-enhanced cryptocurrencies
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Geographical risks - criminals can exploit countries with weak, or absent, national measures for virtual assets
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Transaction patterns - that are irregular, unusual or uncommon which can suggest criminal activity
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Transaction size – if the amount and frequency has no logical business explanation
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Sender or recipient profiles - unusual behaviour can suggest criminal activity
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Source of funds or wealth - which can relate to criminal activity
Cyber-enabled Financial Crimes Trend Report
Arising from an INTERPOL Virtual Discussion Room on 2 July 2020 and officially launched during the INTERPOL Working Group on Dark Web and Virtual Assets on 14 December 2020, the Cyber-enabled Financial Crimes Trend Report provides research on security measures taken against financial crimes facilitated by virtual assets and darknet service providers7.
This report analyses the cyber-enabled component of financial crimes, with a specific focus on darknet and cryptocurrencies. In particular, innovative payment solutions and anonymity enhanced cryptocurrencies (AEC) are being exploited by new white-collar criminals to build a service-based black market within a virtual underground economy (the Dark Web). Intrinsic properties of cryptocurrencies, namely their pseudo-anonymity and non-traceability, do not comply with baseline anti-money laundering and anti- illegal flow controls such as transparency of value transfer. This paper identified key trends driven by the cyber-enabled components and has mapped these trends onto current leading security measures, providing input for risk-based approaches to combating innovative financial crimes.
A Privacy-friendly Way to Harness Data
Data sharing and analysis are essential when it comes to achieving economic growth and solving societal challenges. However, data sharing remains constrained by commercial and/or legal barriers, including the fundamental right to privacy. Innovative technologies such as Federated Learning and Multi-Party Computation offer a way to address this issue by securely learning from sensitive data derived from multiple sources, without having to share this data. TNO’s white paper8 provides more details about this initiative.