1. Money laundering refers to the behavior that an individual tries to cover up the illegal income and its generated income by various means, conceal its source and nature, and legalize its form. Generally speaking, money laundering involves any financial transaction:
1.1 Use funds illegally obtained.
1.2 Carry out activities to promote or conceal crimes.
2. Money laundering is highly regulated by international law. Therefore, Forex trading platform follows the following "anti money laundering code of conduct" to avoid being sanctioned by future legal procedures.
3. The lawbreakers take the opportunity to claim the fund as their legitimate rights and interests in the foreign exchange market from the legislative department and tax payers by taking advantage of the company's procedures of deposit / withdrawal.
4. For example, if a company allows an entity to deposit money into a transaction account of another entity, the entity with the transaction account can withdraw the money and transfer it to its own bank account, which is called its own income. This will result in inconsistent flows between the receiving entity and the withdrawing entity. Criminals may use this method to transfer funds and conceal the true source of funds without being found by law enforcement. This example is also applicable to the transfer of transaction amount between different trading accounts with different constitution.
5. To avoid the company being suspected of money laundering, the basic principle of the company is to prohibit the transfer of funds between different entities. To do this, Forex trading platform must execute the kcy ("customer identification") program.