Electronic Money Laundering, The Dark Side of Fintech: An Overview of the Most Recent Cases

Abstract

Fintech has significantly expanded the offer of financial services available to users, facilitating the spread of new financing, payment and exchange services in increasingly large sections of the population. However, there is a downside, represented by the lack of organic regulation that defines the perimeter of legality. World legislators, Europeans in particular, have started building a structured legal framework and to prevent (or to catch) opportunistic or criminal behaviors. Among the unavoidable challenges for the anti-money laundering system are those related to the development of FinTech which produces significant volumes of transactions. In this paper it is provided a systematic review of a) the most common money laundering patterns; b) the European anti-money laundering legal framework, and c) the most recent and relevant fraud cases detected by the enforcements agencies. The main objective of this research is to verify whether the behavior of economic players within the FinTech sector can be contained within the limits of legality. Another objective, far from secondary, is to analyze the current patterns that lead to money laundering, also verifying whether there are tools, within the FinTech itself, capable of exploiting technologies and identifying dark or illegal practices. The recent case study of scandals within the FinTech industry further helps to support the hypotheses and conclusions of the research itself.