Cyberhorizon Hit with Major Penalty for AML and CTF Breaches

The Isle of Man Gambling Supervision Commission (GSC) has slapped Cyberhorizon, a digital office hosting service, with a hefty £140,000 (€167,297/$183,576) penalty. The fine is a result of serious breaches related to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. This enforcement action sends a clear message about the GSC’s commitment to upholding strict compliance standards in the gambling sector and related service industries.

Cyberhorizon Faces £140,000 Penalty for Serious AML and CTF Breaches in Isle of Man

Cyberhorizon, which held a license in the Isle of Man from March 5, 2021, to September 25, 2023, came under scrutiny when the GSC conducted a supervisory investigation in June 2023. The investigation revealed multiple violations of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019.

Key findings indicated that Cyberhorizon had failed to regularly review customer risk assessments, a critical requirement for combating money laundering and terrorist financing in the gambling sector. Moreover, the company did not implement a comprehensive technology risk assessment prior to its launch, raising further concerns about its operational integrity.

In addition, Cyberhorizon was found to have continued customer relationships with clients who had not provided enhanced due diligence or met essential regulatory standards. Compounding these issues, Cyberhorizon neglected to establish a method for retrieving records following the cessation of its license, a crucial step in maintaining regulatory compliance.

A Lack of Transparency in Cyberhorizon’s Client Relationships

Cyberhorizon provides a video-based office platform designed for virtual collaboration, offering various built-in tools for team interaction. However, it remains unclear which clients within the gambling industry Cyberhorizon serves or has served. Neither the GSC’s report nor Cyberhorizon’s website provides specific information about past or current partnerships, adding an extra layer of opacity to the situation.

This lack of transparency, combined with the identified compliance gaps, raised red flags for the Gambling Supervision Commission. The regulator’s concerns were serious enough to warrant a substantial financial penalty.

Penalty Reflects Seriousness of Non-Compliance

Initially, the GSC proposed a penalty of £200,000 but later reduced it to £140,000 due to Cyberhorizon’s cooperation during the investigation. Despite the reduction, the GSC made it clear in its post-settlement statement that the severity of Cyberhorizon’s non-compliance could not be understated.

“The Commission is satisfied that the imposition of the civil penalty on Cyberhorizon reflects the serious nature of the non-compliance and issues identified,” the GSC stated. The regulator also acknowledged that Cyberhorizon’s directors recognized and accepted the shortcomings in their adherence to the AML and CTF Code.

A Stern Warning to the Industry

The GSC’s decision to penalize Cyberhorizon serves as a wake-up call to other service providers in the gambling sector. The regulator emphasized that all firms involved in regulated gambling activities have an obligation to identify and mitigate risks related to money laundering and terrorist financing effectively.

The GSC also warned that it would continue to exercise its powers “robustly” to protect the Isle of Man’s reputation as a responsible and well-regulated jurisdiction. This stance reaffirms the regulator’s dedication to ensuring the integrity and trustworthiness of businesses operating under its purview.

Upholding the Integrity of the Isle of Man’s Gambling Sector

Cyberhorizon’s £140,000 penalty underscores the critical importance of adhering to AML and CTF regulations within the gambling sector. The Isle of Man Gambling Supervision Commission’s decisive action not only holds Cyberhorizon accountable for its serious breaches but also serves as a reminder to all operators of the rigorous standards they must meet. As the Isle of Man continues to position itself as a premier, well-regulated gambling jurisdiction, maintaining a high level of regulatory compliance remains non-negotiable for all license holders.