An online trading platform has been fined €420,000 by the Financial Intelligence Analysis Unit (FIAU) for “systemic” failures to understand and mitigate potential money-laundering risks posed by its clients.
Alchemy Markets was found to not only have lacked a comprehensive understanding of the risks it was exposed to but also failed to monitor and scrutinise transactions carried out by its customers.
The FIAU said the company did not have measures in place to ensure that the information on its customers was complete and up to date.
Furthermore, transactions being carried out were “far from being in line with the little information available on the customers”, the FIAU said.
In one case, the FIAU found Alchemy Markets failed to question how a customer who claimed to have an annual income of less than €100,000 managed to deposit $1.7 million between 2015 and 2018.
The FIAU said no clarifications were sought by the company, nor any documentary evidence obtained to substantiate these transfers.
In another case, the FIAU found that a customer described as a self-employed kitchen equipment supplier, with a yearly income not exceeding €50,000, deposited $77,800 in the space of just 20 days.
The FIAU said the deposits should have triggered a requirement to obtain more information and documentation from the customer to describe how the deposits were funded.
It also said Alchemy Markets did not ensure that the person responsible for monitoring compliance with anti-money laundering laws had sufficient knowledge, expertise and time for such an onerous position.
The FIAU said it was “worrying” that a number of cases that merited further action by Alchemy Markets’ money-laundering reporting officer were not properly followed up.
Adding to the list of concerns, the FIAU said the company failed to carry out adequate checks on clients with links to high-risks countries like Syria, Iraq, Libya and Tunisia.
The FIAU’s power to issue fines has been the subject of intense court scrutiny of late.
In its latest decision, a court criticised the “dangerous” system adopted by the FIAU in the imposition of fines which, despite being unconstitutional as they breached people’s fundamental right to a fair hearing, were also sustaining it, since the amounts are deposited into a fund for its own use.