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11/07/24
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Institute Alerts Public Accountants in Cyprus to Deal with Terrorism Financing Involving Crypto
On July 9, the Institute of Certified Public Accountants of Cyprus (ICPAC) issued a compliance circular addressed to all members, companies, as well as compliance officers of the institute regarding financing of terrorist activities.
The aim of the circular was to alert them of the risks and threats associated with terrorist financing, noting that it may happen through both legitimate and illegitimate funds and there is a need to monitor transactions and implement solid Know Your Client (KYC) as a major measure to mitigate the risks.
Law enforcement agencies used to be in charge of detecting and preventing terrorist financing and terrorist activities, but given the inherent difficulty of managing the risks since the amounts involved may be either very small or very large, the ICPAC wants its members to step in.
“These days, given the nature of services provided and the role of professionals as gatekeepers, it is a requirement for obliged entities to take an active role in the prevention phase,” said the institute.
The ICPAC mentioned funding methods used for such activities, including those related to traditional financial institutions or alternative methods via EMI’s, payment institutions, crowdfunding, payment in cryptocurrencies and more.
When it comes to cryptocurrency assets, the institute wants its members to consider their potential abuse for anonymous cross-border peer-to-peer transfers, collection of cryptocurrency assets as donations to finance terrorism in crowdfunding or charities, as well as online fund-raising campaigns using dark coins or anonymous donations.
Hence, members are directed to focus on making enquiries on reasons for use of crypto assets, screening of crypto wallets on sanctions lists, reviewing crypto wallet activity including the use of mixers or tumblers, ensuring the activation of wallets screening on screening tools, and using specialized blockchain tech tools.
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