#CFT – Page 2 – Federal Financial Analytics

23 09, 2022

FedFin on: Digital Asset AML/CFT Compliance

Arezou Rafikian2022-09-30T12:01:32-04:00September 23rd, 2022|The Vault|

Treasury is seeking comments on issues raised by the President’s executive order (EO) on digital assets to guide further work curbing illicit-finance and national-security risks in this sector. The request includes no policy discussion beyond introductory comments about the risks identified in Treasury’s reports, but the range of questions suggests openness to at least some industry-supported compliance and reporting systems that …

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

23 09, 2022

AML136

Eliza Allen2022-09-26T08:40:55-04:00September 23rd, 2022|1- Financial Services Management|

Digital Asset AML/CFT Compliance

Treasury is seeking comments on issues raised by the President’s executive order (EO) on digital assets to guide further work curbing illicit-finance and national-security risks in this sector. The request includes no policy discussion beyond introductory comments about the risks identified in Treasury’s reports, but the range of questions suggests openness to at least some industry-supported compliance and reporting systems that might facilitate adoption of at least some digital and virtual products.

AML136.pdf…

2 03, 2022

DAILY030222

Eliza Allen2023-04-04T12:58:20-04:00March 2nd, 2022|2- Daily Briefing|

Senate Banking Tackles Crypto Sanctions Compliance

Reflecting ongoing developments, Senate Banking Chairman Brown (D-OH) and several of his Democratic colleagues today wrote to Secretary Yellen heightening their longstanding crypto concerns to specific questions about the extent to which digital assets and exchanges are appropriately captured in AML, sanctions, and CFT regulation. They note in particular the potential for Russia to evade sanctions in the cryptosphere, an issue we anticipated in our policy assessment (see FSM Report SANCTION16).

HFSC Powell Hearing Focuses on Monetary Policy, Geopolitical Risk

As anticipated, today’s HFSC hearing with Fed Chair Powell was almost exclusively focused on Ukraine and the decisions ahead for the FOMC at its mid-March hearing. Mr. Powell made it clear that, while he bemoaned the tragedy unfolding in Ukraine, sanctions policy is outside the Fed’s remit and cyber-risk is being handled to the greatest extent possible. Mr. Powell refused to comment on the Senate stalemate over pending Fed nominations.

Daily030222.pdf

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25 02, 2022

SANCTION16

Arezou Rafikian2023-04-04T15:20:26-04:00February 25th, 2022|5- Client Report|

FedFin Assessment: Sanctions, Crypto, CBDC Outlook all Change Following Invasion

In this report, we address many of the questions we’ve received about U.S. policy in the wake of Russia’s invasion into Ukraine. We focus in particular on sanctions, but also address longer-term policy implications for the global payment system, cryptocurrency, and CBDC. It is impossible to forecast final outcomes since Russia’s intentions are unknown with regard not only to Ukraine, but also peripheral nations it believes reside within its empire that are NATO members. Indeed, developments in some of them (e.g., Eastern Poland) are already arguably within the range of actions that might trigger NATO intervention and, with it, that of the U.S. and many consequences beyond the already-dangerous ones attendant to the Ukraine invasion. As is usual, we will not attempt to forecast Fed monetary policy or that in other nations, but we here note the stresses created by global financial-market uncertainty and broader macroeconomic stress.

SANCTION16.pdf…

6 01, 2022

AML135

Arezou Rafikian2023-04-25T15:44:59-04:00January 6th, 2022|1- Financial Services Management|

AML/CFT Regulatory Reform

As the banking industry has long hoped and Congress last year directed, FinCEN is beginning to develop a new policy framework prioritizing ways to make anti-money laundering (AML) and countering the financing of terrorism (CFT) regulation more risk-based. FinCEN is taking the opportunity of its request for information (RFI) also to seek views on ways to modernize AML/CFT standards, make them more efficient, ensure adherence to global protocols, and toughen rules where necessary to protect national security. Last year’s law required Treasury to enhance law enforcement and submit a report on AML/CFT reform by January of 2022.

AML135.pdf…

6 01, 2022

Analysis of AML/CFT Regulatory Reform

Arezou Rafikian2023-04-25T15:45:12-04:00January 6th, 2022|The Vault|

As the banking industry has long hoped and Congress last year directed,1 FinCEN is beginning to develop a new policy framework prioritizing ways to make anti-money laundering (AML) and countering the financing of terrorism (CFT) regulation more risk-based. FinCEN is taking the opportunity of its request for information (RFI) also to seek views on ways to modernize AML/CFT standards, make them more efficient, ensure adherence to global protocols, and toughen rules where necessary to protect national security. Last year’s law required Treasury to enhance law enforcement and submit a report on AML/CFT….

The full report is available to retainer clients. To find out how you can sign up for the service, click here.…

14 12, 2021

Daily121421

Arezou Rafikian2023-05-23T12:27:52-04:00December 14th, 2021|2- Daily Briefing|

Thompson Takes the Prize
As we anticipated, President Biden today nominated Acting FHFA Director Sandra Thompson to a full term. We expect this appointment to be roundly praised by Democrats and community-advocacy groups. It will draw GOP fire, but likely not serious enough to deter her confirmation next year absent any new facts.

RFI in Limbo, Substantive FDIC Decisions Up in Air
Although fireworks were anticipated at today’s FDIC open meeting, Board members kept discussion regarding the merger RFI to procedure before moving into an executive session at which the matter was surely debated.

OCC Restores Prior CRA Framework Over Industry Objections
Largely as proposed, the OCC today finalized its rule rescinding its controversial 2020 CRA rewrite (see Client Report CRA28) and reverting to the prior CRA framework. The agency generally rejected industry arguments that recission is burdensome given that banks have already implemented the revised framework and expect soon to implement yet another revised interagency framework (see FSM Report CRA30).

FinCEN Slow Walks Structural AML/CFT Rewrite
As required by law earlier this year (see FSM Report AML133), FinCEN today issued an RFI seeking views on ways to enhance AML/CFT regulation. We will shortly provide clients with an in-depth analysis of this RFI, which highlights the importance of a risk-based U.S. system that adapts to emerging illicit-finance trends.

IMF Demands Tough Rules for Stablecoin, Other E-Money
A new IMF blog post calls for comprehensive standards akin to those Democrats today demanded (see …

8 12, 2021

Daily120821

Arezou Rafikian2023-05-23T13:00:59-04:00December 8th, 2021|2- Daily Briefing|

BIS Staff: DeFi Demands Tough Prudential, Governance Standards
As noted on Monday, the BIS has published several policy-making papers targeting different facets of nonbank financial intermediation that are sure to guide both U.S. and global action.

BIS CBDC Experiment Successfully Settles Wholesale FX Transactions
The BIS today ended its joint wholesale CBDC experiment with the French and Swiss central banks, concluding that CBDC can be effectively deployed for international settlements. This is a significant finding and one that surely puts still more pressure on the Fed to issue its discussion draft and then proceed to determine the U.S. role as other major central banks ramp up operations with major market and even reserve-currency impact.

OCC Defines a “Good-Overdraft” Construct
Acting Comptroller Hsu today advanced the anti-overdraft campaign launched last week by CFPB Director Chopra, arguing that overdrafts disadvantage lower-income households and thus erode the trust essential to an industry success.

Daily120821.pdf…

8 12, 2021

CRYPTO23

Arezou Rafikian2023-05-23T13:06:42-04:00December 8th, 2021|5- Client Report|

HFSC Begins Political Taxonomy of Crypto-Asset Policy

As anticipated, today’s HFSC hearing was a marathon session at which industry witnesses defended their business model, Republicans liked it fine, and Democrats worried about a wide array of policy challenges. While both sides of the aisle agreed that cryptoassets might well enhance financial inclusion, partisan battle lines formed over issues such as the extent to which stablecoins are fully reserved, covered by the securities laws, and if a single regulator for this sector is either desirable or feasible. Industry witnesses strongly rejected the PWG’s stablecoin conclusions (see Client Report CRYPTO21), suggesting for example that stablecoins are safer than bank deposits because they are fully – not fractionally – reserved. Although Chairwoman Waters (D-CA) made it clear that this hearing is the start of committee action without indicating its direction, we expect HFSC to proceed to hearing from academics and then from regulators before deciding which legislation – if any – to bring to mark-up.

CRYPTO23.pdf…

8 12, 2021

FedFin: HFSC Begins Political Taxonomy of Crypto-Asset Policy

Arezou Rafikian2023-05-23T13:06:52-04:00December 8th, 2021|The Vault|

As anticipated, today’s HFSC hearing was a marathon session at which industry witnesses defended their business model, Republicans liked it fine, and Democrats worried about a wide array of policy challenges. While both sides of the aisle agreed that cryptoassets might well enhance financial inclusion, partisan battle lines formed over issues such as the extent to which stablecoins are fully reserved, covered by the securities laws, and if a single regulator for this sector is either desirable or feasible. Industry witnesses strongly rejected the PWG’s stablecoin conclusions (see Client Report CRYPTO21), suggesting for example that stablecoins are safer than bank deposits because they are fully – not fractionally – reserved.

The full report is available to retainer clients. To find out how you can sign up for the service, click here.…