Crypto’s Valachi Papers - Forbes
Instead of a mobster with an axe to grind detailing how his bosses initiate new members, commit crimes and hide each other from law enforcement, companies including traditional financial institution Scotiabank, cryptocurrency exchanges Binance and Bitfinex and blockchain investigation firms Chainalysis and Crystal assembled a crack team of compliance officers—dubbed Project Participate—to compile the results of their own investigations into a secretive document, simply titled “Indicators of Suspicion.” After four years helping the Bank of Montreal implement its anti-money-laundering (AML) strategy, Real joined Hong Kong-based Tether in June 2018, the same month the Financial Action Task Force (FATF) published its requirements that, like banks, virtual asset service providers (VASPs) share information with each other about how users move funds from one place to another, called the travel rule.
The report then groups those activities into typologies that make it easier for VASPs to report suspicious activity, giving recommendations for how to prevent such behavior, and how to train compliance officers, as explained by former U.S. Department of Justice deputy assistant attorney general, Jason Weinstein, who is now director of Project Participate member Blockchain Alliance and represents several of the other participants. Data provided to Project Participate by exchanges tended to be limited to illicit behavior on the exchanges themselves, while cryptocurrency investigation firms Ciphertrace, Chainalysis, Elliptic and Bitfury Crystal provided a broader perspective based on the data between exchanges, according to Bitfury Crystal CEO Marina Khaustova, whose firm provided information for the report specifically on phishing scams and anonymous users, she says.
