In this week’s episode, Elliot and John cover a fast-moving slate of anti–financial crime developments across the U.S. and around the globe. They break down former President Trump’s multibillion-dollar lawsuit against JPMorgan, evolving debates over U.S. regulatory burden and supervisory staffing at the Federal Reserve, and new legislative pushes to change AML reporting thresholds.
Internationally, they explore AMLA’s next steps toward direct supervision of 40 high-risk EU financial institutions, significant enforcement actions in Spain and the U.K., and Austrac’s probe into payments giant Airwallex. The conversation also highlights new leadership at the Wolfsberg Group, Europol’s report on skyrocketing maritime cocaine trafficking, and crypto crime findings from Chainalysis and TRM Labs.
The episode closes with a discussion of recent money laundering cases and industry responses to the tragic Minneapolis shooting.
Global AML Shakeups, Crypto Crime Surges, and Major Enforcement Moves - Transcript
Elliot Berman: Hi John. How are you today?
John Byrne: I am good. Like you and many others, we're still digging out from snow, sleet, and cold weather. I know a lot of people have been hit with it that, I'm in Northern Virginia. We typically don't get much snow, but got a lot. And it's been really cold in Milwaukee, so everybody's dealing with all this. So that's always fun in January when nothing's going on.
Elliot Berman: We were talking to Rick Small yesterday and he mentioned that they had, what'd he say, about an inch of ice.
John Byrne: Right,and that's in Charlotte. A bunch of things, both domestic and international.
The first one. This occurred late last week. Trump filed alawsuit. Oh, that's unusual. Oh, no wait, it's not. But this one is a $5billion lawsuit against JP Morgan and specifically CEO Jamie Dimon, accusing them of debanking him, by closing several of his accounts after January 6th. Itwas filed in a Florida State court, Miami-Dade County.
JP Morgan denied that it closes accounts for political orreligious reasons. The quote from JP Morgan is the following, while we regret President Trump has sued us, we believe the suit has no merit. We respect the president's right to sue us and our right to defend ourselves. So, that's gonnabe interesting to see how that plays out.
You'll remember that Florida is one of the couple of states that does allow litigation if you believe your accounts have been closed for political or religious reasons. So I believe this is the first time that statutes been utilized. I could be wrong, but that's why they filed even though Trump's located in Florida, I think that's why they filed the Florida courts.
Elliot Berman: Yeah, there isn't a federal right. Although it is possible not yet. Uh, not yet. There are methods where this may end up in the federal courts. We'll have tosee, but they would still be applying state law.
John Byrne: Before Ihand it back to you, just to stick with the US for a moment, the Wall StreetJournal had a lengthy piece by a couple of their reporters about one of the FedGovernors, Michelle Bowman. She's the vice chair for supervision. They sayshe's cutting staff. And there's concern about oversight. The article goes into detail about that in terms of why they believe that's the case.
They have some people that they've talked to. But here's acouple quotes. Ultimately, according to Bowman, she wants to make the examprocess more transparent and fair for banks. She's criticized the Fed'sexaminers for focusing quote on procedural and documentation shortcomings, which is something that frankly some of our clients have certainly referenced.
But they also believe that cutting staff and reducing oversightcould be problematic. So, we'll see what happens. It's not a surprise. She'sgiven a lot of speeches about regulatory burden relief since she's been in thatrole. So, a piece by the Wall Street Journal, uh, that came out a couple daysago.
Elliot Berman: Movingto Europe. To start at a high level, AMLA has started the data collection process to select the 40 firms for direct supervision. So just to remind ourlisteners, as part of the AMLA regulation. AMLA, the FIU, will in addition tobeing the FIU for the whole group and harmonizing the FIUs at the individual member state level, it is going to be the prudential regulator for 40 financial services companies.
I went back and looked to refresh my own recollection, and it'snot the 40 largest, it's actually more about those that are among the highest risk institutions under the EU wide methodology. So they're gonna look at, if they're highly cross border, meaning they operate in at least six memberstates, they're high risk in terms of their inherent residual money launderingand terrorist financing exposure. They're systemically important in the EU financial system. And if they've demonstrated concerning supervisory histories.
So they're in the data collection now. The process will go onin 26 and 27. The the initial wave of direct supervision will begin in 2028,and it actually gets updated on a three year cycle. So for those of you in the EU, you're already aware of it. For those of us in the United States and otherparts of the world, it's an interesting approach to things.
The Spanish FIU has recommended fining Santander, which is alarge Spanish bank, 40 million Euro due to a number of AML issues in at Openbank, which is its online unit. For that to go forward, the Spanish Council of Ministers has to make a final decision about the fine.
The bank has indicated that these were not money laundering.They were more procedural and risk management issues and that they've alreadybeen fully resolved. But interesting. Santander's a big operator, and again,interesting in the online unit.
And then, uh, moving to Australia. AUSTRAC has launched a probeinto a large payments platform, Airwallex to take a look and see whether it is doing what it's supposed to do with regard to its anti-money laundering program. They have the authority and they've exercised it to appoint an outside auditor to go and do the review.
The interesting thing about this is that the company was in theprocess of gearing up to do a multi-billion dollar stock market listing. So an IPO. And this will could slow that down. We'll have to see. This is a companythat facilitates transfer of funds to multiple jurisdictions. And so, again,the explosion of these global payment platforms that are outside thetraditional platforms are presenting challenges as they come up to speed andwhether or not they're effectively doing what's expected of them. John, whatelse do you have?
John Byrne: Back overin Europe in the UK the Bank of Scotland has been fined for breaking sanctions related to the Russian War in Ukraine. That's the Office of Financial SanctionsImplementation, OFSI. The penalties are for transactions dating back to 2023.They said the bank processed 24 payments in February from a personal account.That account was not identified. The sanctions office, which overseescompliance on behalf of the UK government, said it had concluded that the bankbreached prohibitions on dealing with and making funds available to asanctioned person.
The Bank of Scotland said that it flagged the issue to the UK authorities for the following month. And so the penalty was cut by 50%. AndBank of Scotland, by the way, is part of Lloyd's. It was cut by 50% because itvoluntarily disclosed the breaches a month after the payments were made.
Elliot Berman: TheWolfsberg Group that we've talked about a lot, and I know you've done at leastone podcast with Alan Ketley when he was the head of the Wolfsberg Group, hasannounced that it's appointing Stevenson Monroe as a co-chair and Rachel Sloanto its management committee. This caught my eye for a number of reasons, butthe biggest one is that you and I know Steve Monroe from his years at FinCEN. And he's now with Standard Chartered and he oversees all the global anti-money laundering operations. Rachel Sloan is the BSA officer and head of global AML programs at Citi. And she's joining the management committee.
John Byrne: Europolhas issued a report. This one includes tactics in maritime cocaine trafficking operations. So just a couple days ago, they released this report. This providesan analysis of the many ways that criminal networks, traffic cocaine viamaritime routes.
And according to the report, cocaine trafficking in Europe hasreached what they say are unprecedented levels. Driven by high production inLatin America and increasing demand within the EU. So that report is worthlooking at, obviously for those of us, um, that need to stay on top of the various ways in which criminal organizations can move illicit activity and elicit funds that come from that kind of trafficking.
Elliot Berman: Aformer TD Bank employee in New Jersey has pleaded guilty to taking bribes inorder to orchestrate a money laundering operation of nearly $30 million. As I said to you before we started recording, it wasn't a fancy operation.
He took bribes and what he did is he created accounts in thenames of shell companies that he registered. And then he issued debit cardswhich he shipped to Columbia. Then the money launderers in Columbia withdrewthe clean cash at ATMs. There were 600 debit cards issued and more than 120,000 ATM withdrawals.
John Byrne: Wow.Yeah, that's crazy.
In addition to the Europol report, there's a couple of otherreports that are interesting. I know you saw the one from Chainalysis. What didyou see there?
Elliot Berman:Chainalysis has come out with their 2025 report and they noted that, criminals used crypto to launder $82 billion in 2025. This is up sharply from 10 billionin 2020. And they attribute a big part of the increase to the fast growing Chinese speaking groups. A lot of these Chinese language, money laundering networks are using crypto. They emerged during the pandemic and processed morethan $40 million per day worth of crypto in 2025.
And I know you saw that, uh. TRM Labs also publish their 2025 report.
John Byrne: Yeah.It's interesting how those things came out pretty simultaneously, right? So TRMLabs, they report that illicit crypto activity reached $158 billion in 2025. Upnearly 145% year over year, which is crazy. Other parts of the data, again, this is their 2026 crypto crime report, which obviously assesses 2025.
But here's what stood out based on the authors of the report.Sanctions related activity in 2025 was overwhelmingly driven by Russia LinkedFlows Hack remained a major driver of losses, but were highly concentrated.They say that illicit actors stole $2.87 billion across 150 hacks in 2025.
Fraud remains persistent and industrialized. Illicit activity continues to shrink. Relative to the size of the ecosystem, which is a little counterintuitive from here, but they say illicit flows declined as a share of total crypto activity.
Anyway, the takeaway is clear. This is, again, I am quotingcrypto crime is rising in absolute terms because crypto itself is becomingglobal financial infrastructure according to TRM Lab. So the full report, they posted it on LinkedIn and you can certainly get it on their website.
Elliot Berman: I know you wanted to update our listeners about something that came out of House Financial Services.
John Byrne: Well, wetalked last week that, or after we recorded that the House was, uh, the Financial Services Committee was considering several pieces of legislation,they did pass those. One would increase the thresholds for cash reports in theUS from 10,000 to 30,000, and another would increase the filing thresholds for suspicious activity reports from, I think they said from two to five and someother changes.
Bottom line is these bills have to go to the full House and then to the Senate. So the question of whether that will occur is certainly aquestion. I'm not sure. I think the Senate does have similar legislation. I don't know if the threshold dollar amounts are the same but it is somethingworth looking at. Because there's been active conversation about changing the AML infrastructure and changing the reporting threshold certainly would impact the infrastructure.
Elliot Berman: Yes.The basis of the changes is, part of this drive for burden relief. We'vecertainly heard from a number of folks at larger institutions that these, particularly the currency transaction reports are so routinized and automated that they're not a meaningful burden at this point. For small and medium sizedbanks that may not be true, where it's a more manual process and also happensless often and therefore it's a little harder to stay on top of it since you'renot doing them in gigantic volume.
John Byrne: Correct.I have one, one more item I want to mention. We would be remiss if we didn't,identify the horrific shooting and murder of Alex Pretti over the weekend inMinneapolis. Everybody has seen the various versions of the video, and there'sstill activity going on in terms of whether there'll be legitimate investigations.
But I wanted to mention this from a standpoint of the privatesector. The Minnesota Chamber of Commerce released a letter on January 25th of more than 60 CEOs, including US Bank, and the full text of the letter you canread online, but I will mention a couple of items from it. They say withyesterday's tragic news, we are calling for an immediate deescalation oftensions and for state, local, and federal officials to work together to findreal solutions.
There's more in the letter than that, but I did wanted tomention that 'cause this, all of this will impact our world because anytime you're dealing with security related issues, it's relevant to law enforcementand relative relevant to how our industry interacts, with these organizations.
Elliot Berman: Alltrue. Our February webinar will be the 26th of February and live streaming at 1:00 PM Eastern Time. You can register for that now, and I'll be moderating agreat panel. In talking about how do you enhance the strategic value of SARs.You can sign up for that and we'd love to have you.
And if you missed our webinar in last week on humantrafficking. It should be available on our website when you hear this.
John Byrne: One thingon human trafficking. I just saw that the Marriott Corporation was complimentedon the amazing work that they have done in terms of training and awarenessdealing with human trafficking. It's always good to, to recognize when privatesector entities step up. And according to government officials and outside anti-trafficking organizations, the Marriott Corporation has done a tremendousjob. So I thought I would, I just saw that come across here. I thought that I'd mentioned that.
Elliot Berman: That's great. John, you want to give our first official plug for the AML PartnershipForum?
John Byrne: Thefourth annual Forum will be in Washington, DC. 19th and 20th of March. Two days instead of three this time. We have an exciting group of panelists andpresentations, the information available on the AMLPF website. We have somereally excellent sponsors for the event. It's gonna be your opportunity to interact with not only private sector, but public sector folks that work together on AML related issues. So we hope you can join us in Washington DC in March.
Elliot Berman: John, you try to stay warm. I'll try to stay warm and hopefully you won't get anymore snow.
John Byrne: They sayover the weekend. We'll see.
Elliot Berman: Allright. Bye-bye.