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10.03.24
FinCEN Finalizes Rule Requiring AML/CFT Programs for Registered Investment Advisers and Exempt Reporting Advisers
On September 4, 2024, the U.S Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published a final rule that expands the definition of “financial institution” to include Registered Investment Advisers (RIAs) and Exempt Reporting Advisers (ERAs) and subjects these advisers to certain affirmative anti-money laundering (AML) requirements.1 FinCEN implemented this rule to address perceived risks regarding illicit finance and national security. Covered RIAs and ERAs must comply with the final rule, which requires implementing an AML program that includes certain specified elements, by January 1, 2026. While the final rule generally tracks the existing AML/CFT regime for other financial institutions, RIAs and ERAs had long been outside the ambit of AML/CFT regulations.
Alerts
8.14.24
The Critical Reporting Requirement U.S. Companies Can’t Afford to Ignore: Upcoming Deadlines for Beneficial Ownership Information Compliance
On January 1, 2024, the new Beneficial Ownership Information (BOI) reporting requirements under the U.S. Corporate Transparency Act (CTA) took effect.
Alerts
2.26.24
FinCEN Proposes Significant Expansion of AML/CFT Obligations to Cover Registered Investment Advisers, Venture Capital Advisers, and Private Fund Advisers
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed a sweeping expansion of the Bank Secrecy Act’s (BSA) affirmative anti-money laundering (AML) and countering the financing of terrorism (CFT) obligations.
Alerts
11.07.23
FinCEN Releases Proposed Rule Designating CVC Mixing as a “Primary Money Laundering Concern”
On October 23, 2023, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) released a Notice of Proposed Rulemaking (proposed rule) addressing “mixing transactions” that involve convertible virtual currency (CVC). The proposed rule would require “covered financial institutions” to report certain information about CVC mixing transactions and maintain records of those transactions.
Alerts
10.18.23
Navigating the Current State of Financial Services for Marijuana Businesses and Preparing for Future Changes in Cannabis Banking
The legal landscape for marijuana-related businesses (MRBs) has seen significant change and challenges in recent years. Despite the legalization of marijuana for medical or recreational use in various states, it remains a controlled substance under the federal Controlled Substances Act (CSA). As a result, banks and certain payment companies have generally been hesitant or unwilling to provide financial services to MRBs due to risk management and regulatory compliance challenges, particularly with respect to anti-money laundering laws.
Alerts
6.13.23
Beware: Increasingly Aggressive Enforcement Actions in the Crypto Asset Industry Puts Companies on Notice
Regulators are increasingly taking enforcement action against crypto asset industry participants for violating anti-money laundering (AML) and sanctions laws. Regulators are concerned about the illicit use of crypto assets and are increasingly scrutinizing crypto asset companies. As we have previously discussed,1 companies in the crypto asset industry must be acutely aware of their AML and sanctions obligations or face the risk of an enforcement action by a federal or state regulator.
Alerts
4.25.23
Treasury Risk Assessment Emphasizes That Decentralized Crypto Companies Have AML and Sanctions Compliance Obligations
Earlier this month, the U.S. Department of the Treasury (Treasury) released its Illicit Finance Risk Assessment of Decentralized Finance (Assessment). This Assessment, part of a broad regulatory scrutiny of entities that operate in the Decentralized Finance (DeFi) space (see the explanation below), focuses on the illicit finance risks associated with virtual assets.
Alerts
3.30.23
"Sanctions Are the New FCPA": The Familiar Evolution of Sanctions Enforcement
Earlier this month, Deputy Attorney General for the U.S. Department of Justice (DOJ) Lisa Monaco reiterated that “sanctions are the new FCPA.” During the last year, the DOJ has begun pouring resources into sanctions enforcement, just as it did 20 years ago when it revitalized the Foreign Corrupt Practices Act (FCPA).
Client Advisories
12.14.22
Crypto Exchange Agrees to Pay More Than $362,000 to Settle Alleged Sanctions Violations
On November 28, 2022, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced that Payward, Inc. d/b/a Kraken, a U.S.-based cryptocurrency exchange, agreed to pay $362,158.70 to settle charges relating to its apparent violations of the Iranian Transactions and Sanctions Regulations that could have resulted in civil penalties up to almost $273 million. Kraken also agreed to spend an additional $100,000 to implement more extensive sanctions controls. These penalties are significant in light of the screening processes Kraken had implemented to prevent violations and reflect OFAC’s focus on the use of geolocation, IP blocking, and other electronic monitoring tools throughout the life of a customer relationship, and not just at onboarding.
Alerts
10.18.22
Cryptocurrency Exchange Platform Agrees to Pay over $53 Million for Anti-Money Laundering and Sanctions Violations
On October 11, 2022, the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) announced settlements with Bittrex Inc. (Bittrex). The settlements arise from violations of the Bank Secrecy Act—the federal law that imposes anti-money laundering (AML) requirements on financial institutions—and violations of OFAC's sanctions regimes.
Alerts
8.18.22
China Amends Anti-Monopoly Law
This month, important amendments to the Chinese Anti-Monopoly Law (AML) came into force. Implementing regulations are now being finalized which will provide further detail on each set of changes.1 The Chinese antitrust regulator, the State Administration for Market Regulation (SAMR), has concurrently proposed higher revenue thresholds for merger filings, with the final text expected by the end of this year.
Alerts
8.18.22
Money Services Businesses Penalized for Failure to Adopt Robust Anti-Money Laundering Practices
Two recent federal enforcement actions—announced the same day—have underlined the need for crypto companies to carefully consider their anti-money laundering (AML) obligations or else risk significant penalties.