Financial Crimes to Watch Out for in 2023

Financial Crimes to Watch Out for in 2023

As we move into more uncertain times, merchants and businesses need to be aware of the potential financial crimes of 2023 that may arise. Financial crimes of 2023 can range from simple fraudulent activities, such as credit card scams, to more complex schemes involving money laundering or insider trading.

Not only can these crimes result in financial losses for businesses, but they can also damage a company’s reputation and create legal issues. In this article, we will explore the various financial crimes of 2023, discuss why it is essential for merchants to be concerned about them, and identify possible ways businesses can protect themselves from any financial crimes of 2023 impacting their business operations.

What are the financial crimes of 2023?

There are a number of financial crimes that are likely to occur in 2023. Some of the most likely to happen based on the assessment of security industry experts include:

  • Credit card fraud: This type of crime involves the unauthorized use of someone’s credit card information to make purchases or withdraw cash. With the increasing reliance on online shopping and the availability of personal information on the internet, credit card fraud is likely to continue to be a significant problem in 2023. Phishing and chargeback fraud are two common threats of financial crimes of 2023 that businesses face.
  • Phishing scams are a common threat faced by businesses of all types, including eCommerce stores. These scams involve fraudsters posing as someone else to obtain sensitive information from a company, such as credit card details, login credentials, passwords, and personal identification information about customers. These scams often aim to gather as much data as possible to build comprehensive profiles of as many consumers as possible, which can be used for identity theft and other illegal purposes. Phishing scams can take various forms, such as fake calls from banks to verify suspicious activity on a store’s platform. To protect against phishing, it is essential for merchants to continuously educate their teams about these scams and to test them with mock phishing attacks. Training team members to handle such situations can help prevent costly and reputation-damaging incidents.

Chargeback fraud is another fraudulent activity that can be challenging for merchants to defend against. This occurs when a customer purchases from a merchant, receives the goods, and then claims that their card has been stolen to have the charge reversed. To protect against chargeback fraud, merchants must have appropriate safeguards in place and ensure that their team is adequately trained on security protocols. Failing to do so can result in costly chargeback fees and a higher risk classification, thereby higher processing fees, by merchant service providers.

  • Money laundering: Money laundering is the process of disguising the proceeds of illegal activity as legitimate funds. This can be done through a variety of methods, such as transferring money through multiple bank accounts or using shell companies. Money laundering is often used to conceal the proceeds of drug trafficking, terrorism, and other illegal activities.

Due to the recent implementation of new sanctions against Russia, the risk of increased fines for money laundering, and a looming economic recession, businesses must have robust anti-money laundering measures in place. Allowing oneself to be vulnerable to money launderers and potentially violating the Money Laundering Regulations can have detrimental financial consequences for a company in these trying times.

If the Metaverse becomes more popular, it could potentially become a breeding ground for money laundering activities. Digital assets provide an attractive means for money launderers to clean their illicit funds, and the Metaverse, with its virtual businesses and virtual goods, offers a perfect platform for them to carry out their activities using the same techniques of placement, layering, and extraction. These transactions are difficult to track due to the repetitive use of different amounts.

As web3 technology develops and matures, money launderers will likely find more sophisticated ways to exploit the Metaverse. As new regulations are introduced, there may be a rise in the use of complex structures to conceal beneficial ownership.

  • Cybercrime: With the increasing reliance on technology in the business world, cybercrime is likely to be a significant financial crime of 2023. This can include activities such as hacking, ransomware attacks, and phishing scams. These crimes can result in substantial financial losses for businesses, as well as damage to a company’s reputation.
  • Cryptocurrency-related crime: The use of cryptocurrencies, such as Bitcoin, has grown in recent years. The segment has seen a rapid expansion in valuation during that time, and the scope of digital assets has expanded to other forms of assets, such as NFTs. However, the anonymity of these transactions has also made them a popular choice for money launderers and other criminals. Cryptocurrencies are here to stay, but the unregulated era is coming to an end. The recent collapse of well-known name brands in the industry[MF1] , such as Terra Luna, FTX, and BlockFi, may be emboldening regulators to start taking action to protect consumers

Regardless of what the digital asset management industry has been saying to the contrary and touting the self-regulation of this novice and fledging industry, digital assets are also subject to AML laws. Asset managers or any merchant accepting crypto assets as a form of payment will need to take steps to verify the identities of their customers and report any suspicious activity.

Increasing regulation is being put in place to prevent money laundering and counter the financing of terrorism (AML/CFT) in the cryptocurrency and digital asset management industry. This trend is expected to continue in 2023 and beyond, with the EU implementing the Markets in Crypto Assets (MiCA) framework, which categorizes different types of cryptocurrencies and establishes a consistent approach for all crypto projects within the region. Other jurisdictions, such as Hong Kong, Panama, and Seychelles, that previously had minimal regulation are also anticipated to follow suit.

In 2023, the Financial Action Task Force (FATF) will continue to implement new AML standards for digital assets. Crypto and digital asset management companies must comply with Know Your Customer (KYC) and AML requirements and implement effective KYC/AML compliance programs, including customer due diligence, transaction monitoring, and reporting of suspicious activity.

Technology solutions are helping financial institutions, and law enforcement agencies detect and investigate crypto-related transactions more efficiently. The concept of Know Your Transaction (KYT) is also becoming more prevalent as part of the financial crime risk management framework. This has led to cases such as the Tornado Cash crypto mixing service raising questions about ultimate beneficiaries and strengthening KYC policies.

These new regulations and standards will make it more challenging for criminals to use digital assets for money laundering and more accessible for law enforcement to track and prosecute money launderers. While compliance with these regulations may be costly and time-consuming for businesses, it is necessary for smooth operation in the digital asset space.

Why should merchants be concerned with the financial crimes of 2023?

Financial crimes can have severe consequences for merchants and businesses. In addition to financial losses, these crimes can damage a company’s reputation, making it difficult to attract customers and investors. In the case of credit card fraud, for example, businesses may be held liable for fraudulent charges made on their customers’ cards. This can result in chargebacks and fines for merchants, as well as a loss of customer trust. Similarly, money laundering and insider trading can result in legal issues for businesses, including fines and potential jail time for those involved.

In addition to the direct financial consequences, financial crimes can also have indirect effects on businesses. For example, suppose a company is involved in money laundering. In that case, it could be subject to government investigations and sanctions, which can damage the company’s reputation and make it more challenging to do business. Similarly, cybercrime can result in the loss of sensitive data or the disruption of business operations, which can significantly affect a company’s bottom line.

Overall, merchants need to be aware of the potential financial crimes of 2023 and take steps to protect themselves and their businesses.

How can businesses protect themselves from the financial crimes of 2023?

There are a number of steps that businesses can take to protect themselves from financial crimes in 2023. Merchants can start by implementing robust cybersecurity measures Some of the prevention methods merchants can take to protect themselves from the financial crimes of 2023 are:

There are several cybersecurity measures that merchants can implement to protect their businesses and customers:

  • Use strong and unique passwords: Use a password manager to generate and store strong, unique passwords for all accounts and devices.
  • Enable two-factor authentication: This adds an extra layer of security by requiring an additional form of verification (such as a code sent to a phone) when logging in.
  • Secure your network: Use a firewall to protect your network from external threats and make sure all devices on the network are secure.
  • Protect your customers’ data: Make sure to encrypt sensitive information such as credit card numbers and personal details.
  • Keep software and security systems up to date: Regularly update software and security systems to fix vulnerabilities and protect against new threats.
  • Train your team members: Educate your employees on cybersecurity best practices and make sure they are aware of the risks associated with clicking on links or downloading attachments from unknown sources.
  • Use a reputable payment processor: Choose a payment processor that is PCI-compliant and has robust security measures in place.

By implementing these measures, merchants can help protect their businesses and customers from cyber security financial crimes of 2023. Ensuring compliance with anti-money laundering laws and regulations should be another area of focus. This can include implementing internal controls to detect and prevent money laundering, conducting due diligence on customers and business partners, and reporting suspicious activity to the appropriate authorities.

Finally, implementing credit card fraud prevention measures is vital. This can include implementing controls to detect and prevent credit card fraud, such as requiring additional verification for large or unusual transactions and conducting regular audits to identify potentially fraudulent activity. Some specific measures merchants can take to protect against credit card fraud include:

  • Use a payment processor that is PCI compliant: Payment Card Industry (PCI) compliance means that the payment processor follows industry-standard security measures to protect against credit card fraud.
  • Implement AVS (Address Verification System): AVS checks the billing address provided by the customer with the address on file with the credit card issuer. This helps to verify that the person making the purchase is the cardholder.
  • Use CVV (Card Verification Value) verification: The CVV is a three- or four-digit code on the back of a credit card. Requiring this code for online purchases can help verify that the person making the purchase has physical possession of the card.
  • Implement 3D Secure: 3D Secure is an authentication protocol that adds an extra layer of security to online transactions. It requires the cardholder to enter a one-time code sent to their phone or email before completing the purchase.
  • Monitor for suspicious activity: Regularly review account activity and look for any suspicious charges or patterns of behavior.


In 2023, a significant concern for merchants and businesses will be the financial crimes of 2023. From credit card fraud to money laundering to insider trading, these crimes can result in significant financial losses and damage a company’s reputation. It is essential for merchants to be aware of the potential financial crimes of 2023 and take steps to protect themselves and their businesses. Businesses can significantly reduce the risk of financial crime and protect themselves from the consequences by implementing strong cybersecurity measures, ensuring compliance with anti-money laundering laws, implementing insider trading policies, and implementing fraud prevention measures.


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