Compliance News

THE ENVIRONMENT

In this edition, we highlight class action law suits as well as regulatory developments. In the blockchain space, the class action attorneys seem as active as the regulators. Remember to prepare for litigation as you run your compliance and governance programs. This month, in the case against Uniswap, plaintiffs claim users would have been protected from fraud if Uniswap was a regulated entity. i.e., if it was required to prevent fraudulent transactions. The claims focus on Uniswap’s collection of fees for each transaction without regard to culling out fraud on the “exchange”.

SEC and Other Enforcement Actions

What is a Communication System: Bloomberg L.P and Bloomberg Tradebook presented their comments to the SEC Amendment to Exchange Act Rule 3b-16 regarding expansion of Regulation ATS, NMS stock and other securities and the rule regarding the definition of Exchange. The Bloomberg comment letter is important and helpful advocacy for fintech firms. Soon after they were posted, the SEC extended the comment period for new rule.

Cyber on Top Again: SEC Enforcement Division allocated 20 additional positions to the SEC Crypto Assets and Cyber Unit. Security is still a top concern!

YOUR COMPLIANCE & RISK PROGRAM

Transparency Benefits: NY Dept of Financial Services issued new Virtual Currency Guidance noting that although virtual currency presents compliance challenges, it conversely “allows a historical view of a virtual currency transmission between wallet addresses, providing the opportunity for greater visibility into transaction lineage than is typically found with traditional, fiat funds transfers”

OCC Consent Order: AML Programs remain the linchpin for blockchain compliance. The OCC consent order against Anchorage highlights the focus on a strong written and formal program as agreed in any supervisory agreement.

What if developments in crypto could transform how we approach centralized compliance? Read this article from NASDAQ and our founder.