Briefing: Closing the money laundering loophole being exploited by law firms working for crypto scammers and Russian warlords

The problem: The limited scope of the anti-money laundering regime means dirty money can be used to fund abusive lawsuits

• Strategic Lawsuits Against Public Participation ( SLAPPs) enable the super-wealthy and powerful to abuse British courts to silence critical speech, stymying journalists, activists, and ordinary members of the public from publishing stories in the public interest that reveal evidence of criminal, corrupt or unethical activity.
• A significant loophole in the anti-money laundering (AML) rules regime means that when lawyers advise clients on legal tactics to shut down critics through SLAPPs, they are not obliged to do due diligence on their client, allowing them to turn a blind eye to dubious sources of wealth or funds being used to bring the abusive lawsuit.
• Even where these lawyers do pick up on dodgy dealings, they are not obliged to report their suspicions. This means they cannot be prosecuted for the offence of ‘failure to disclose’ knowledge or suspicion of money laundering set out in section 330 of the Proceeds of Crime Act 2002 , (POCA).
• While estate agents, banks, accountancy firms, and lawyers who do transactional work are required to do AML checks on their clients, those working in media specialist legal services are not covered by AML rules. This means that certain law firms have become a ‘go to’ for deep-pocketed companies and powerful individuals – who may be involved in corruption or other criminality – seeking to use the courts to silence their critics.

The opportunity: Closing the loophole as part of wider action on SLAPPs and the proposed shake-up of the AML regime

• In December 2025, the Justice Secretary announced that the government will take further action on tackling SLAPPs. Weeks later the government’s new Anti-Corruption Strategy committed to considering approaches for “comprehensively tackling all SLAPPs” and consulting on “adding new regulated activities” to AML rules, as part of its plan to “tackle weaknesses in sectors vulnerable to exploitation by corrupt actors”.
• This followed the government’s recent commitment to implement major reforms to how businesses are supervised for their compliance with AML rules, and its announcement of a new Anti-Money Laundering and Asset Recovery Strategy (AMLAR) in the Autumn Budget .
• The government should now use this positive momentum to make progress on these two key commitments in the Anti-Corruption Strategy around SLAPPs and ensuring high-risk activities like libel litigation are subject to AML rules.

Recommendations

1. The government should bring forward universal anti-SLAPP measures in the next King’s Speech to ensure Parliament will finally be given the opportunity to establish robust, accessible and comprehensive protections against abusive legal threats.
2. The government should use the AMLAR Strategy as a vehicle for closing the gap in the regulated sector around media specialist services, to ensure lawyers are required to conduct proper AML checks on their clients and report suspicions of money laundering.