Sustainable Governance: Building the governance, risk and compliance bridge
Fraud Prevention & Cybersecurity
OpenSea UI vulnerability allowed hackers to get NFTs below market with an inadvertent acceptance of a buy offer.
A measured approach to preventing fraud in DeFi – A Florida regulator provides educational guidance.
Example of global collaboration to cover opportunities and risks of digital assets.
SEC and Other Enforcement Actions
Registrations Requirements. CFTC Enforcement filed an enforcement action against Polymarket, alleging it violated federal commodities laws by offering prediction markets in the U.S. without registering with the agency. Polymarket cooperated with the investigation leading to a reduced penalty of $1.4M.
State jury finds crypto-related products not securities. A Connecticut jury addressed whether cryptocurrency products were securities and cleared the defendants of liability in an alleged fraudulent operation. The jury’s decision hinged on the finding that the company’s customers were not passive investors.
SEC EXAMS published a Risk Alert of observations from private fund adviser examinations.
Proposed definition of exchange to expand to capture new digital asset projects and tough sentiment only allows for 30 days of comment. Commissioner Peirce’s Dissenting Statement describes some of the challenges.
YOUR COMPLIANCE & RISK PROGRAM
Does your Code of Ethics cover all assets or is it too narrow? This NFT example is a good use case for considering an expansion.
Have you wished for more engagement & better culture of compliance? Look at DAOs with a lens for increased ownership of compliance. In this video – there is an interesting discussion about the opportunity in web3 investment clubs.