#QuickBiteCompliance Day 144
Informal Value Transfer Systems: The Hidden Pathways of Money Movement
Imagine you need to send money to a friend in another country, but instead of using a bank, you give cash to a local shopkeeper. That shopkeeper calls another shopkeeper in your friend’s country, who then gives your friend the same amount. No bank, no formal records—just trust.
This is called an Informal Value Transfer System (IVTS)—also known as an Alternative Remittance System. It’s been used for centuries in many cultures and is often legal. But criminals have also found ways to exploit it for financial crime.
How Bad Actors Use IVTS for Crime
🔸 Moving Dirty Money – Since IVTS operates outside the banking system, criminals can transfer large sums without detection.
🔸 Avoiding Sanctions – Sanctioned individuals or terrorist groups use IVTS to move funds while staying off the radar.
🔸 Funding Illegal Trades – Drug traffickers and human smugglers use IVTS to pay suppliers and launder profits.
🔸 Fake Business Transactions – Criminals disguise illegal IVTS payments as business deals, making them harder to trace.
Why It Matters
Not all IVTS transactions are bad—many people rely on them for legitimate reasons. But without proper oversight, criminals can use IVTS to bypass financial regulations. Smarter Regtech (Regulatory Technology) and Open Source AML tools, like Mulai Console, help financial institutions detect suspicious transactions while protecting honest users.
💡 Learn more about financial crime terms here: https://lnkd.in/gGmG8VZ5
#MoneyLaundering #AML #FinancialCrime #KYC #RiskManagement #Regtech #InclusiveRegtech #OpenSourceAML #100HariNulis
