Compliance risks for crowdfunding. A neglected aspect of money laundering, terrorist financing and fraud

Teichmann, Fabian; Boticiu, Sonia; Sergi, Bruno S.

doi:10.1108/jfc-05-2022-0116

Cited by 5 publications

(3 citation statements)

References 27 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Initially, banks were considered to be the sole source of financing, but further to the financial crisis witnessed in 2008, banks’ ability to lend and people’s confidence in banks are now substantively reduced (Teichmann et al , 2022). As such, an alternative source of financing for both businesses and individuals, known as crowdfunding, has been introduced in recent years, which discards the traditional financing institutions to apply for financing through the crowd.…”

Section: Introductionmentioning

confidence: 99%

Tax evasion and money laundering through crowdfunding: a comparative study of the laws of Mauritius, UK and US

Beebeejaun

2023

JFC

View full text Add to dashboard Cite

Purpose The phenomenal proliferation of crowdfunding platforms raises concerns on the heightened occurrence of financial crimes since billions of funds are exchanged through these online systems frequently. Accordingly, some countries have implemented legislative responses to address these risks, although each countries’ laws have varying degrees of severity. Hence, the purpose of this study is to assess the efficiency and robustness of Mauritian laws to combat financial crimes that may arise from a crowdfunding transaction with a particular emphasis on money laundering and tax evasion. Design/methodology/approach To achieve this research objective, the black letter approach was used to analyse Mauritian rules and regulations on the researched topic and a comparative analysis was carried out against the corresponding laws on crowdfunding in some other jurisdictions, notably the UK and the USA with the view of suggesting the policy recommendations to Mauritian authorities. Findings It was found that there is still scope for improving the existing legal and regulatory framework on crowdfunding in Mauritius to prevent instances of money laundering and tax evasion. The paper suggests that a crowdfunding operator must be categorised as a reporting person and must carry out regular due diligence checks. There must also be more collaboration in terms of information exchanges and training sessions among the tax authority of Mauritius, crowdfunding operators, fund seekers and investors to shed light on the tax treatment of income and deductions to avoid issues of tax evasion. Originality/value At present, to the best of the authors’ knowledge, this study is amongst the first academic writings on the efficiency of Mauritian laws in dealing with the risk of financial crimes through crowdfunding, and also, because existing literature is quite scarce on assessing the adequacy of crowdfunding rules in developing countries, this research aims at filling in the gap in literature. The study is carried out with the aim of combining a large amount of empirical, theoretical and factual information that can be of use to various stakeholders and not only to academics.

show abstract

Section: Introductionmentioning

confidence: 99%

Tax evasion and money laundering through crowdfunding: a comparative study of the laws of Mauritius, UK and US

Beebeejaun

2023

JFC

View full text Add to dashboard Cite

show abstract

“…Several studies have also discussed shariah compliance, with the findings indicating that shariah compliance is the top priority of Islamic fintech and the important features that make them Islamic (AlAbbad et al , 2019). Then, several studies examine the potential of crowdfunding for money laundering, terrorism financing and fraud (Teichmann et al , 2022). Concerning the background above, there needs to be research discussing shariah compliance implementation and weak supervision of the implementation of ICF.…”

Section: Introductionmentioning

confidence: 99%

Islamic crowdfunding and Shariah compliance regulation: problems and oversight

Sudarwanto,

Kharisma,

Cahyaningsih

2023

JFC

View full text Add to dashboard Cite

Purpose This study aims to identify the problems in shariah compliance and the weak oversight of implementing Islamic crowdfunding (ICF). Shariah compliance regulation is an essential subsystem in Islamic social finance ecosystems. Design/methodology/approach This type of research is legal research. The research approaches are the statute, comparative and conceptual approaches. The study in this research examines Indonesia, the UK and Malaysia. Findings ICF is one of the fastest-growing sectors of Islamic financial technology (fintech). The Islamic fintech sector is showing maturity signals with a market size of $79bn in 2021, projected at $179bn in 2026. Malaysia, Saudi Arabia and Indonesia lead the Index by Global Islamic Fintech (GIFT) Index scores. However, low shariah compliance is still an issue in implementing ICF. This problem is caused by regulatory support that is still lacking and oversight of shariah compliance is not optimal. On the one hand, shariah compliance is the ICF core principle for Shariah Governance. Research limitations/implications This study examines the regulation and oversight of ICF in Indonesia, Malaysia and the UK. Indonesia and Malaysia, a country with the highest GIFT index score in the world, and the UK, a country with an Islamic finance sector experiencing rapid growth. Practical implications The research results on shariah compliance regulation in ICF are helpful as a comprehensive approach for developing sustainable Islamic social finance ecosystems. Social implications Shariah compliance is the core principle of ICF governance. Its implementation can increase public trust. Originality/value Crowdfunding platform and issuers in ICF must implement shariah compliance. Therefore, it is essential to consider the presence of shariah compliance requirements and a Shariah Supervisory Board (DPS).

show abstract

“…The AI era opens up wide opportunities for the development of ESG investments thanks to technological support for improving decision making by all stakeholders (Teichmann et al, 2022). Investors get access to "smart" analytics of investment projects grouped, sorted, and ranked according to the criterion of the degree of compliance with ESG principles, contribution to the implementation of the SDGs, and the correlation between risk and profitability (Aroul et al, 2022;Popkova et al, 2020;Popkova and Sergi, 2022).…”

Section: Introductionmentioning

confidence: 99%