Thunder only happens
when it’s raining, and players only love you when they’re playing. Fleetwood Mac
could not have been more right, and even more precise when it comes to the
recent money laundering trend in the UAE. Payment agents and real estate
brokers are cashing in on the unreported crypto funds of investors, making them
the darlings of the UAE FIU, who are trying to locate these facilitators. The
overwhelming criticism towards the regulators in light of the recent BBC expose
has shed light on one form of fraud that was conducted in the European Union
and the United Kingdom. Yet, a similar method of money laundering has been
highlighted by the UAE Ministry of Economics, which has made the UAE Government
very wary due to the FATF gray listing a year ago.
The #UAE has imposed a monetary penalty of Dh115 million ($31.3M) in the first quarter (Q1) of 2023 to combat #financial fraud, such as money laundering and terrorism financing. For more information click here: https://t.co/ZdIunxdcmUpic.twitter.com/WIEEGL109E
— Shufti Pro (@Shufti_Pro) May 2, 2023
As part of the real
estate boom in the golden city of Dubai and the marble city of Abu Dhabi, many
investors wish to catch the real estate wave and purchase property in the area.
Many of these investors hold a significant amount of cryptocurrencies, hoping
to liquidize their virtual assets into tangibles. The real estate brokerage
market in the UAE has picked up on this trend, and now many brokerages are
following this route and allowing access to purchase real estate, such as
apartments, housing, and office space in the UAE, using cryptocurrencies.
The problem arises
when the main actors of the transaction: the buyers, real estate brokers, and
liquidity providers, work unregulated. This has been highlighted by the UAE
Ministry of Economics, which stated that such companies will now be in the
spotlight for money laundering indicators. Facilitators of such transactions
usually cover their money laundering schemes with claims of focusing on
financial markets, analytics, and extensive development while serving as a
liquidity provider for holders of cryptocurrencies vis-à-vis a third-party
provider.
Serving as a point of
contact for the third-party provider and later providing the real estate
opportunity creates a façade that the broker does not fall under any liability
for money laundering and KYC checks. Yet, this is precisely the root cause of a
money laundering indicator, facilitating a transaction for…
