SupTech can make anti-money laundering and countering the financing of terrorism supervision more effective, the EBA finds (August 12, 2025)
The European Banking Authority (EBA) published a Report on the use of technology tools in anti-money laundering and countering the financing of terrorism (AML/CFT) supervision (SupTech). The Report takes stock of ongoing innovation efforts by competent authorities in the EU and explores how these can support the effective implementation of the new EU AML/CFT framework.
The new AML/CFT framework represents a significant step forward in the EU’s fight against financial crime. A key element is the creation of the Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA), which will coordinate AML/CFT supervision at EU level. This institutional change provides a unique opportunity to reassess supervisory approaches and harness the potential of technology to enhance oversight. To inform this work, the EBA conducted a survey of national competent authorities (NCAs) and, together with the European Commission’s AMLA Task Force, organized a dedicated workshop to identify trends, challenges, and good practices in the use of SupTech in AML/CFT supervision.
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This Policy Statement summarizes feedback on our proposals in CP24/20 for the Supplementary Regime, as well as our approach to the Post-Repeal Regime. It sets out our response and final rules and guidance to be included in the FCA Handbook (August 7, 2025)
The Financial Conduct Authority (FCA) has published Policy Statement PS25/12, announcing final reforms to the safeguarding rules for payment and e-money firms. These changes stem from the prior consultation CP24/20 and are designed to strengthen consumer protection by reducing shortfalls in customer funds, ensuring rapid and cost-efficient fund returns in the event of firm failure, and enhancing the FCA’s ability to detect and act on poor safeguarding practices. Key enhancements include daily reconciliations on business days, mandatory annual audits by qualified auditors, maintaining a resolution pack for insolvency scenarios, and more detailed monthly regulatory reporting. The new Supplementary Regime will take effect on 7 May 2026, with further consultation to follow before introducing the proposed Post-Repeal “CASS-style” Regime.
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DFS (New York State Department of Financial Services) Investigation Found Deficient Transaction Monitoring and Compliance Program Led to Increased Money-Laundering Risk (August 7, 2025)
Paxos Trust Company (“Paxos”) will pay a $26.5 million penalty to New York State for failure to conduct sufficient due diligence of its former partner, Binance, and systemic failures in Paxos’s anti-money laundering program. In addition to the penalty, Paxos has agreed to invest an additional $22 million to improve its compliance program and remediate deficiencies pursuant to a plan approved by DFS.
Regulated entities must maintain appropriate risk management frameworks that correspond to their business risks, which includes relationships with business partners and third-party vendors. The Department continues taking significant steps to ensure accountability, in turn protecting consumers and safeguarding the integrity of the financial system.
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Proposals that would allow mortgage lenders to account for unconverted cryptocurrency assets in the underwriting process (July 25, 2025)
Washington, D.C. – U.S. Senators have raised serious concerns about proposals allowing mortgage lenders to count unconverted cryptocurrency in underwriting. They warned that such measures could pose significant risks to consumers, the housing market, and financial stability.
Current policy requires cryptocurrency to be converted to U.S. dollars with documentation before being considered for federally-backed mortgages. Senators stressed that including unconverted crypto exposes borrowers to volatility, liquidity issues, and risks of theft or cyberattacks, potentially increasing mortgage default risks.
Lawmakers also highlighted potential conflicts of interest involving the FHFA Director’s dual role as Chair of the Enterprises’ Boards, raising questions about impartiality in approving such proposals.
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FCA fines Barclays £42 million for poor handling of financial crime risks (July 16, 2025)
The FCA has fined Barclays Bank UK PLC and Barclays Bank PLC a total of £42 million for separate instances of failings in its financial crime risk management – one relating to WealthTek and one relating to Stunt & Co. Barclays Bank UK PLC will make a voluntary payment to WealthTek’s clients.
The FCA has taken action against Barclays for serious anti-money laundering failings. Barclays UK allowed WealthTek to open a client money account without proper checks, leading to £34 million in deposits; the bank will make a voluntary £6.3 million payment to affected clients. Separately, Barclays PLC has been fined £39.3 million for inadequate controls when servicing Stunt & Co, which received £46.8 million linked to the Fowler Oldfield laundering operation. These cases highlight significant weaknesses in Barclays’ risk management despite clear warnings from law enforcement.
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The FCA has fined Monzo Bank Ltd £21,091,300 for its inadequate anti-financial crime systems and controls between October 2018 and August 2020 (July 8, 2025)
Monzo also repeatedly breached a requirement preventing it from opening accounts for high-risk customers between August 2020 and June 2022.
Monzo’s customer base has grown rapidly, increasing almost tenfold from around 600,000 in 2018 to over 5.8 million in 2022. However, Monzo’s financial crime controls failed to keep pace with its customer and product growth.
Monzo failed to design, implement and maintain adequate customer onboarding, customer risk assessment and transaction monitoring systems to mitigate the risk of financial crime. These systemic failings resulted in the FCA requiring a comprehensive, independent review of the firm’s financial crime framework in August 2020.
Alongside the independent review, the FCA imposed a requirement preventing Monzo from opening new accounts for high-risk customers. However, between August 2020 and June 2022, it repeatedly failed to comply with the terms of the requirement, including signing up over 34,000 high-risk customers.
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