Reverse Compliance: How Criminals Use KYC/AML Mechanisms Against Regulators
Published
February 2, 2026
Author
Khrabrykh S. A.
Original language
English
This report by Sergey Khrabrykh, President of Observatoire ARGA, explores the paradoxical phenomenon of using KYC (Know Your Customer) and AML (Anti-Money Laundering) protective procedures to cover criminal activities. The author details tactics for creating “flawless” straw man profiles, the use of legal services to mix assets, and methods for exploiting bureaucratic gaps in the compliance systems of banks and crypto exchanges. The report reveals how strict adherence to formal protocols sometimes assists bad actors in laundering funds.
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