The Intersection of Financial Crime and Cryptocurrencies

Regulatory Ramblings

Ep #56 with Chengyi Ong (Chainalysis)
Chengyi Ong leads public policy in the Asia-Pacific region for Chainalysis out of from the firm’s regional headquarters in Singapore. Drawing on Chainalysis’ blockchain data analytics platform, she works with public and private sector stakeholders to distil developments in digital asset markets, and their intersections with global and regional regulatory trends.

Prior to joining Chainalysis, Chengyi spent 13 years at the Monetary Authority of Singapore, holding roles in financial regulation and supervision, financial sector development, and central banking. She also served as the Advisor to the Executive Director for Southeast Asia at the International Monetary Fund.

In this episode of Regulatory Ramblings, she talks to host Ajay Shamdasani about the intersection of money laundering, financial crime and cryptocurrencies.

The conversation begins with Chengyi describing her upbringing, formative years, choice of career path and her time as a regulator at the MAS. She then goes on to talk about what Chainalysis does, its market position, and her interest in the digital asset sector.

She shares her views on the rising levels of both crypto native and non-crypto native money laundering, why such trends are growing and the types of crimes emanating from Asia – making reference to key findings from Chainalysis’ recent report on the matter, including the 2024 Crypto Crime Report and the 2024 Crypto Money Laundering Report.

Chengyi also discusses her thoughts on stablecoins being used for money laundering, what her firm’s report says about the destination of illicit funds and what the best ways are to prevent crypto native money laundering – especially in the Asia-Pacific. To that end, she is candid about what regional regulators should do to tackle this issue, noting that more needs to be done. What ensues is a deeper chat about what the role of regulators in ferreting out financial crime should be vis a vis cryptocurrency exchanges and financial institutions – the latter of which are financial gatekeepers in their own right.

The conversation concludes with Chengyi reflecting on the arc of her career and how AML regulations have evolved in APAC over the years. She stresses that in an age of aggressive enforcement actions, sanctions and not insubstantial fines, it will be imperative for organizations to verify the entities that are transacting and engaging with. She offers some suggestions as to how they may do so.

HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

فصول

1. The Intersection of Financial Crime and Cryptocurrencies (00:00:00)

2. The Multifaceted Experience of Regulating at the Monetary Authority of Singapore (00:03:23)

3. Policy, Supervision, and Implementation (00:06:51)

4. Blockchain Intelligence: How Chainalysis Navigates the Crypto Landscape (00:09:14)

5. The Pernicious Crypto Native Money Laundering and Its Global Impact (00:15:01)

6. Will Crypto-Based Money Laundering Intensify? (00:22:31)

7. Forced Labor, Scam Compounds, and Tracing Illicit Flows (00:25:21)

8. Freezing Illicit Funds and the Role of Stablecoins (00:30:39)

9. Key Findings on Obfuscation Techniques and Centralized Exchange Risks (00:36:00)

10. Illicit Crypto Funds and Centralized Exchanges (00:38:23)

11. Preventing Crypto-Native Money Laundering: A Whole-of-Ecosystem Approach (00:40:12)

12. Regulatory Responses to Crypto Money Laundering in Asia (00:43:51)

13. Implementing the FATF Travel Rule for Crypto Transactions (00:49:15)

14. The Role of Regulators and Crypto Exchanges in Combating Money Laundering (00:54:24)

15. The Evolution of AML Regulations in the Asia-Pacific (01:00:38)

16. Advice for Aspiring Professionals: Navigating the Intersection of Law, Finance, and Technology (01:08:59)