Lawmakers in Egypt and US addressing AML and KYC

U.S. and Egyptian officials are pushing for AML and KYC regulation to combat fraud and other illicit financial flows, though the American measures have yet to be approved.

Egypt requires digital ID for fintech, non-bank finance

The Financial Regulatory Authority of Egypt issued several decrees regulating the development and use of fintech within non-banking financial services and activities.

Decree 139 of 2023 outlines requirements for the digital infrastructure of non-banking financial institutions and further establishes governance, risk management and cybersecurity frameworks. It also requires that non-banking institutions enter a service level agreement with its customers and establish a 24/7 customer service center.

Decree 140 requires non-banking financial service firms to have a license certifying that they have processes established to verify digital IDs and keep records of their use. The digital identity process outlines multi-factor authentication requirements based on risks, and including biometrics.

Decree 141 establishes a registry for companies using fintech for outsourcing services. Registered entities must ensure data security and customer privacy. They must also get liability insurance. A registration fee of 25,000 Egyptian pounds (US$809) “for each sector of activity” according to an analysis article from international law firm Clyde & Co. The registration is valid for one year.

Bipartisan digital asset AML act to extend rules combatting crypto fraud

In the U.S., Sens. Roger Marshall, Elizabeth Warren, Lindsey Graham and Joe Manchin reintroduced the bipartisan Digital Asset Anti-Money Laundering Act for consideration. It is designed to mitigate risks to national security by closing loopholes that can be used to finance of terrorism, drug trafficking and other criminal activities, according to a release.

If passed, the act would extend responsibilities of the Bank Secrecy Act, including KYC requirements, to digital wallet providers, validators, and other participants that facilitate digital transactions.

The act would also require banks to verify customer identities for unhosted wallets that would otherwise bypass AML checks. Anyone engaging in a transaction greater than $10,000 through one or more offshore accounts would need to file a report with the Internal Revenue Service.

The bill has been endorsed by the Major County Sheriffs of America, AARP and Global Financial Integrity, among others.

Article Topics

AML  |  biometrics  |  cryptocurrency  |  digital identity  |  fraud prevention  |  KYC  |  selfie biometrics