MT SecureTrade Ltd (Registration No C56545), a remote gaming operator which traded under the name Guts Gaming Ltd until end 2014, has been fined just over €53,000 for anti-money laundering breaches. The compliance review was carried out in 2020 by the Financial Intelligence Analysis Unit (FIAU) and notice of the administrative measure was published on the 11th of July 2023.
MT SecureTrade Ltd, no longer in operation, was a subsidiary of GiG (Gaming Innovation Group) at the time of the compliance review. SiGMA News reached out to GiG, who, in exclusive comments reiterated that the administrative penalty relates to business activities carried out between 2018 and 2020.
Claudio Caruana, General Counsel, explained that in 2020, preceding the FIAU & Malta Gaming Authority (MGA) review, in a strategic move to mitigate regulatory risk and focus exclusively on B2B, GiG announced the shutdown of their white label business and divested their proprietary B2C brands. This was followed by the voluntary surrender of the licence by MTSecureTrade Limited. Accordingly, the accounts reviewed by FIAU concerned customer relationships which had already been terminated or were soon to be terminated. Notwithstanding this, GiG fully cooperated with the FIAU & the MGA during the review process.
FIAU’s review in detail
The administrative penalty resulting in the FIAU fine falls under the terms of Regulation 21 of the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR). The FIAU administrative notice provides details of four legal provisions breached.
In 30% of the files reviewed, the company failed to obtain the necessary information in relation to players’ occupation, employment, or the activities from which the customer was deriving their wealth. In relation to this, in spite of the mitigation measures in place, where players were not allowed to withdraw winnings until the source of wealth questionnaire was submitted, it resulted that some players were allowed to withdraw pending questionnaire submission. Related to this, it was noted that MT SecureTrade blocked singular accounts rather than players, which resulted in players registering multiple accounts and depositing large amounts.
In 70% of the files reviewed, FIAU concluded that there was insufficient transaction monitoring. The company failed to monitor sufficiently in spite of evidence of gaming pattern changes and other irregular player actions.
In 70% of the files reviewed, FIAU noted that the company failed to conduct customer risk assessment (CRA) in a timely manner due to the adoption of a manual risk rating procedure. CRAs were meant to be effected when a player reached the €2,000 threshold within a six-month rolling period.
Finally, MT SecureTrade was in breach of sections of Regulation 11 relating to enhanced due diligence. The company had failed to carry out such measures in 10% of player files reviewed who had represented more than one high ML/FT (money laundering/terrorist financing). The company had failed to obtain sufficient EDD documentation in 10% of files reviewed. In relation to this breach, the notice gave details of deposits by one player in a three month and 3 weeks span, where the player deposited €100,800, €42,773 of which were new money. The player’s source of wealth documentation indicated a net salary of €2,739 per month, which should have led the company to obtain additional evidence to substantiate the origin of all the funds being deposited.
The FIAU, in operation since October 2002, is the national central agency in Malta responsible for the dissemination of intelligence to combat money laundering and the funding of terrorism. It is set up as an agency within the ministry responsible for finance but has a separate judicial personality and operates autonomously. In its enforcement capacity, it determines any administrative measures necessary relating to identified ML/FT breaches and ensures the remediation of such failures.
SiGMA’s regional summit in Limassol, Cyprus
SiGMA Balkans/CIS is only a few weeks away. It will be held at the City of Dreams, Europe’s first integrated resort from the 04 – 07 September.
Industry operators will be able to connect with leading affiliates and two conference stages will feature a number of high-profile guest speakers. There will also be an expo floor, including the SiGMA Startup Village. So much more is happening in Limassol! Check out all the details here.
