US Pays $115M to 40K Victims of Fraud Scheme Processed by MoneyGram

Friday, 10/02/2023 | 22:42 GMT by Solomon Oladipupo
  • MoneyGram paid $125 million in 2018 for the refund.
  • The American money transfer company entered a DPA with the Justice Department in 2012.
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Bloomberg

The United States has started the disbursement of a total of $115 million as compensation to 38,889 victims of fraud schemes processed by MoneyGram. The victims, who are mostly elderly, are being compensated in full via the US Postal Inspection Serivce (USPIS), the Department of Justice (DOJ) announced in a statement on Friday.

The disbursement comes 12 years after MoneyGram entered into a deferred prosecution agreement (DPA) with the DOJ for "willfully failing" to maintain an anti-money laundering system that prevents fraud, especially against vulnerable groups.

The DOJ explained that MoneyGram extended the DPA in November 2018 and made additional enhanced compliance obligations. As part of the extension, the American cross-border peer-to-peer payments and money transfer company forfeited $125 million, the DOJ said, adding that the amount covered for the amount of consumer fraud transactions that the company processed and is part of the terms of the DPA.

“The USPIS is using these forfeited funds to compensate the victims of the fraud through the remission process. MoneyGram completed its DPA in May 2021,” DOJ added.

Kraken Reaches $30M Settlement, Ends Staking Programme

Meanwhile, in a separate development, the cryptocurrency exchange Kraken on Friday agreed to pay $30 million to the United States Securities and Exchange Commission (SEC) after the US regulator accused the exchange of failing to register its staking -as-a-service programme. As part of the settlement deal, Kraken agreed to stop offering the programme to its US customers.

However, while Kraken in a blogpost confirmed that it will immediately bar US customers from accessing the on-chain staking service, the cryptocurrency exchange noted it will 'unstake' staked Ether only after the upcoming Shanghai upgrade.

In its criticism of Kraken’s staking programme, the SEC noted that the offering provided “very little protection” despite the risks involved.

“Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws,” Gary Gensler, SEC’s Chair, explained.

The United States has started the disbursement of a total of $115 million as compensation to 38,889 victims of fraud schemes processed by MoneyGram. The victims, who are mostly elderly, are being compensated in full via the US Postal Inspection Serivce (USPIS), the Department of Justice (DOJ) announced in a statement on Friday.

The disbursement comes 12 years after MoneyGram entered into a deferred prosecution agreement (DPA) with the DOJ for "willfully failing" to maintain an anti-money laundering system that prevents fraud, especially against vulnerable groups.

The DOJ explained that MoneyGram extended the DPA in November 2018 and made additional enhanced compliance obligations. As part of the extension, the American cross-border peer-to-peer payments and money transfer company forfeited $125 million, the DOJ said, adding that the amount covered for the amount of consumer fraud transactions that the company processed and is part of the terms of the DPA.

“The USPIS is using these forfeited funds to compensate the victims of the fraud through the remission process. MoneyGram completed its DPA in May 2021,” DOJ added.

Kraken Reaches $30M Settlement, Ends Staking Programme

Meanwhile, in a separate development, the cryptocurrency exchange Kraken on Friday agreed to pay $30 million to the United States Securities and Exchange Commission (SEC) after the US regulator accused the exchange of failing to register its staking -as-a-service programme. As part of the settlement deal, Kraken agreed to stop offering the programme to its US customers.

However, while Kraken in a blogpost confirmed that it will immediately bar US customers from accessing the on-chain staking service, the cryptocurrency exchange noted it will 'unstake' staked Ether only after the upcoming Shanghai upgrade.

In its criticism of Kraken’s staking programme, the SEC noted that the offering provided “very little protection” despite the risks involved.

“Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws,” Gary Gensler, SEC’s Chair, explained.

About the Author: Solomon Oladipupo
Solomon Oladipupo
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About the Author: Solomon Oladipupo
Solomon Oladipupo is a journalist and editor from Nigeria that covers the tech, FX, fintech and cryptocurrency industries. He is a former assistant editor at AgroNigeria Magazine where he covered the agribusiness industry. Solomon holds a first-class degree in Journalism & Mass Communication from the University of Lagos where he graduated top of his class.
  • 1050 Articles
  • 35 Followers

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