Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week, the former CEO of FTX, the cryptocurrency platform embroiled in a devastating collapse and bankruptcy, denies any malicious intent or wrongdoing in the company's downfall and loss of billions of investor dollars. Read the full story and more news below:
Top story
Former FTX founder denies malicious intent in crypto platform collapse
Sam Bankman-Fried, the former CEO of the cryptocurrency exchange FTX, sat down for a rare Q&A during the New York Times DealBook summit this week and answered questions about the collapse and bankruptcy of the company he helmed. Bankman-Fried said that he “screwed up” and admitted that there were little to no controls surrounding conflicts of interest and risk management at the company. Bankman-Fried and his company FTX are accused of running a Ponzi scheme, lacking corporate finance controls, and using company funds to benefit its own employees with personal gifts, including cars and houses, and wiping out billions of dollars from investors in the process.
Government
EU uncovers 2.2B EUR tax fraud scheme
Financial authorities in the EU have uncovered a fraud scheme involving value-added tax (VAT) that resulted in more than 2.2B EUR in lost tax revenue. The investivation was carried out by 14 EU-member states and involved more than 9,000 entities over the course of about 18 months. Organizations involved in the investigation included several organized crime groups. Those involved are accused of working together using VAT loopholes, known as carousels, to avoid paying the tax on goods. It is considered to be the largest VAT-carousel scheme in EU history.
Cybercrime ring that stole more than 120M USD taken down, Europol says
More than 142 suspects who stole more than 120M USD using a cybercrime tactic known as ‘spoofing’ were arrested and had their assets seized this week. The announcement of the takedown comes after a cooperative investigation of authorities in 10 countries sought to seize a website that provided easy methods to impersonate, or spoof, companies such as Amazon and PayPal and trick unsuspecting users into giving up personal information such as passwords, credit cards, and other personal bank information. The website itself took in more than 3M USD in fees, while allowing its users to steal more than 120M USD.
Business
AI-powered risk screening in drug supply chain coming soon, DHS says
The Department of Homeland Security has approved funding for new research that will tap artificial intelligence and machine learning to investigate weaknesses in the pharmaceutical industry and drug supply chains. The research project, which will be carried out by Quantifind, a risk screening organization that normally works with the financial sector, will analyze the entirety of the drug supply chain for risk. Risks in the supply chain could include the amount of foreign influence, the potential use of forced labor and human rights abuses, and more. The research carried out by Quantifind, and funded by the DHS, will not seek to prescribe policy changes or fixes, but will give governing bodies the information they need to enact policy changes down the road.