The New York Department of Financial Services (NYDFS) recently published updated guidance establishing heightened standards for virtual currency businesses licensed in New York when listing or delisting cryptocurrencies.
When FTX founder Sam Bankman-Fried was found guilty on all seven charges on November 2, 2023, the general sentiment in the cryptocurrency community was one of relief. Former FTX users who lost funds in the exchange’s implosion are satisfied that the alleged mastermind behind the schemes will likely spend the rest of his life behind bars. Business leaders of legitimate exchanges are pleased to see justice prevail against a man who disgraced their industry.
The evolution of virtual assets is rapidly reshaping the financial landscape. As innovative new products like fiat-referenced virtual assets (FRVAs) emerge, regulatory frameworks must adapt to promote innovation while protecting consumers. This evolving spectrum of virtual assets requires agile governance which is evidenced by the Virtual Asset Regulatory Authority's (VARA) recent update to its regulatory framework governing fiat-referenced virtual assets (FRVAs), commonly known as stablecoins.
Sanctions compliance is of utmost importance for an unhindered functioning of international businesses and global finance. Companies that fail to comply with sanctions regulations may face severe penalties, reputational damage, and legal repercussions. To ensure a robust and effective sanctions compliance program, organizations must understand and implement the Office of Foreign Assets Control (OFAC) framework. This article delves into the intricacies of the OFAC framework, its components, and provides comprehensive insights on achieving effective sanctions compliance.
On Nov 23, 2021, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) — collectively referred to as the ‘agencies’ — issued a joint statement summarizing their interagency ‘policy sprints’ focused on crypto-assets.
On November 8, 2021, the United States Department of the Treasury sanctioned cryptocurrency exchange Chatex and its associated support network — IZIBITS OU, Chatextech SIA, and Hightrade Finance Ltd — for facilitating financial transactions for ransomware actors.
Stablecoins — pegged to a dependable fiat currency such as the US dollar — have become a cornerstone of the crypto ecosystem. As per industry reports, there has been an increase in the issuance of stablecoins and the market cap has grown 18 fold over the past year, surpassing $100 billion in May 2021. The stablecoin market cap is currently $112.15 billion. In particular, stablecoins such as Tether (USDT), USD Coin (USDC), and Pax Dollar (USDP) have jumped from $30 billion in circulation in January 2021 to about $125 billion as of mid-September.
With the advent of financial institutions exploring the DeFi space, panelists for Merkle Science’s second Regulating Defi webinar Jai Ramaswamy (Chief Regulatory Officer at a16z), Jason P. Allegrante (Chief Legal & Compliance Officer at Fireblocks), Vanessa Grellet (Head of Portfolio Growth at CoinFund), and Sandra Ro (Chief Executive Officer at Global Blockchain Business Council) discussed the possible implications of the convergence between traditional financial and crypto markets. With the DeFi industry witnessing a massive surge from financial institutions (FIs) and the regulatory scrutiny around DeFi increasing, our panelists forayed into several timely topics including striking a balance between fostering innovation and the need to protect consumers, combating anti-money laundering activities, and preserving financial stability.
Of Late, the U.S. has been hit by a wave of disruptive ransomware attacks. In the official press release detailing the actions taken by regulators to counter ransomware, the U.S. Department of Treasury noted that roughly $400 million in ransom was paid to malicious cyber actors in 2020, more than four times the amount in 2019. Globally, the frequency of ransomware attacks has increased dramatically in 2021, with ransomware attacks surging 93% in the last six months.
Decentralized Finance (DeFi), which is pegged to be the next frontier of fintech innovation, has grown exponentially over the past year. With regulatory scrutiny over DeFi increasing at a rapid pace, Merkle Science’s President, Americas and Global Chief Legal Officer Mary Beth Buchanan was joined at Blockchain Central UNGA 2021 — hosted by the GBBC — by industry experts Ambre Soubiran (CEO, Kaiko), Daniel Peled (Co-Founder, Orbs), Harriet Browning (Director, Business Development and Strategic Sales Manager for EMEA, ConsenSys), Raymond Zenkich (President and Founder, Evertas), and John Salmon (Partner, Hogan & Lovells) to talk about the advancement of DeFi and crypto.
