The ever-evolving nature of the financial world and regulations to keep up with the technological trends and new methods of financial crimes caused high levels of increase in the anti-money laundering (AML) related fines imposed on the financial institutions and other organizations from different industries. While the most common reason for the penalties is related to failures of applying effective due diligence, AML and risk management checks, in 2023 the highest amount of fines issued to the cryptocurrency sector (approximately $5.8 billion) followed by banking, gambling and trading and brokerage. The volume and amount of the fines, as well as the variety of the sectors highlight the fact that regulators are taking regulatory compliance issues more seriously than ever and the FIs need to look for more high-tech compliance solutions to ensure that they remain compliant and refrain from those penalties.

1. Binance – $4.3bn fine
Cryptocurrency exchange platform Binance accepted the charges including engagement in money laundering, unauthorized money transmitting and violations of different sanctions and was fined $4.3 bn.

According to the regulators and prosecutors, the poorly managed control system of Binance let cybercriminals, terrorists, sanction violators and child abusers to exploit the platform for their illegal financial activities for years. The main reason behind this lies in the fact that the crypto exchange system applies neither a know your customer (KYC) process nor a transaction screening. Users were able to create accounts and exchange money by submitting only an email address.

The founder and CEO of Binance, Changpeng Zhao, resigned from his post and was fined $50m after being found guilty of failure in implementing and practicing effective KYC and AML programs.

 2. Crown Resorts – $450m fine
The Australian Transaction Reports and Analysis Centre (AUSTRAC) pleaded the Crown Resorts guilty for their AML regulation breaches and their failure of evaluating the money laundering and terrorist financing risks in the casinos of Melbourn and Perth and applied a penalty worth of $450m.

Although the amount of the penalty was reconciled by AUSTRAC and Crown Resorts, it still needed the final affirmation from the Federal Court of Australia. If it is to be approved, it will be the third-largest penalty in Australian corporate history.

 3. Deutsche Bank – $186m fine
Deutsche Bank and its U.S. affiliates faced a penalty of $186m imposed by the Federal Reserve as a result of their insufficient AML controls and programs. DB was previously associated with crimes related to money laundering prevention issues and other inadequacies and was warned by the Federal Reserve to put extra effort in these problems or they might be punished with more serious fines.  Another topic noticed and highlighted by the Federal Reserve was the bank’s risk and data management.

Deutsche Bank promised a focus and commitment to work on and repair these issues pointed by the Fed in the upcoming future.

 4. Bank of Queensland – $50m capital penalty
The Australian Bank of Queensland (BOQ) was found to violate the judicious standards and neglect the AML laws which resulted in a capital penalty of $50m imposed upon the bank.

In comparison to similar charges applied to other banks, the total cost for the BOQ could be higher because it was requested to improve its control systems as well.

 5. William Hill – £19.2m fine
Three gambling firms that belong to William Hill and its sister brand Mr Green were found to fail in carrying out social responsibility and applying anti-money laundering procedures and fined with £19.2m.

Customers were allowed to spend and deposit high amounts of money in a surreal amount of time without asking for any source of income or applying AML checks.  Most of these issues occurred during the global pandemic even though the Gambling Commission warned organizations to be extra careful during those times to prevent exploitation of vulnerable people.

 6. Guaranty Trust Bank UK Ltd – £7.6m fine
A penalty worth of  £7.6m was given to the Guaranty Trust Bank UK Ltd due to its failure in carrying out sufficient customer risk assessment and due diligence procedures and finally remaining weak in applying an effective AML program.

At the beginning, the fine was higher because the bank was charged with similar offenses previously. However, thanks to the good conduct and compatibility of the bank, a discount of 30% was applied to the penalty.

 7. ADM Investor Services International Ltd – £6.47m fine
ADM Investor Services International Limited, a commodities services broker based in the UK was fined £6.47 m penalty as the company failed in implementing an adequate AML program and checks.

According to the report of the FCA, the global customer portfolio and operational side of the company entail serious money laundering risks. The customer base of the company included politically exposed persons (PEPs) who are individuals having a risky position for holding a crucial public function and being vulnerable to get involved in criminal financial activities such as money laundering, bribery and terrorist financing.

8. In Touch Games – £6.1m fine
The online gaming operator In Touch Games was fined by the UK Gambling Commission (UKGC) £6.1m with the charges of failure in social responsibility and AML compliance.

A customer with an unstable gaming cycle and extended play periods were not noticed and flagged. Also in spite of the obvious risky behavior, they did not ask for the evidence on how a customer earned  £6,000 a month from online gaming.

This penalty was the third one imposed on In Touch Games as it faced a £2.2m settlement in 2019 and a £3.4m fine in 2021.

 9. Royal Bank of Canada – $5.5m fine
As a result of the failures in reporting suspicious financial activities and applying sufficient AML and CFT programs, Royal Bank of Canada was fined $5.5 m worth of penalty.

Canada’s financial supervisor Fintrac revealed 16 missed reports which created an uneasiness and questions about the Canada’s biggest bank’s way of work and what other Canadian financial institutions might be failing in their internal procedures.

 10. Al Rayan Bank – £4m fine
The FCA imposed a penalty of £4m on the UK’s biggest Islamic bank which is the Al Rayan Bank. The reasons for the penalty include bank’s failures in applying effective and up-to-date due diligence procedures, sufficient checks on the source of wealth of high-risk clients and applying satisfactory processes for managing big amounts of cash deposits.