Predictive AML Technology or Precursor to Financial Surveillance?
The Rage reported that DARPA (Defense Advanced Research Projects Agency) has launched a new program, Anticipatory and Adaptive Anti-Money Laundering (A3ML), designed to modernize anti-money laundering (AML) practices. The program seeks to employ predictive algorithms to prevent illicit financial activities before they occur.
The A3ML program aims to develop advanced algorithms to analyze financial transaction data and predict potential illicit activities. The goal, according to A3ML program manager David Dewhurst, is to "make it prohibitively expensive for adversaries to transfer illicit value through the global financial system.”
DARPA highlighted concerns about countries like North Korea, which has allegedly leveraged cryptocurrencies to "fund its missile program."
The program adopts predictive policing methods, which have faced backlash for reinforcing bias.
Effectiveness of Current AML Systems
Research cited in the report highlights that traditional AML systems are largely ineffective, with only "0.02% of illicit funds" being successfully intercepted globally, despite the significant compliance costs.
The article mentions that "predictive algorithms may erode the presumption of innocence" and disproportionately target vulnerable populations.
Research cited in the report highlights that traditional AML systems are largely ineffective, with only "0.02% of illicit funds" being successfully intercepted globally, despite the significant compliance costs.
The implementation of these algorithms may amplify biases, as they rely on historical data that already reflect systemic inequities, leading to "disproportionate enforcement in minority neighborhoods."
