Category

AML

Category

Since the ICO boom in 2017, governments around the world began settling on different approaches to regulating the crypto industry. Many legislatures and regulators proactively drafted new laws, regulations, guidance and frameworks for the crypto industry. Others used investigatory authorities and enforcement actions to regulate the industry. We expect that governments around the world will remain active for the foreseeable future as cryptoassets become more mainstream. Baker McKenzie’s new guide, Crypto around the World, presents…

Introduction On October 8, 2020, the U.S. Department of Justice (“DOJ”) released a Cryptocurrency Enforcement Framework (the “Framework”) authored by the Attorney General’s Cyber Digital Task Force. The Framework is the second detailed report authored by the Cyber-Digital Task Force addressing cryptocurrencies. The Framework provides a self-described comprehensive overview of what the DOJ considers to be emerging threats and enforcement challenges associated with cryptocurrencies. The Framework also details the collaboration that the Department of Justice…

As we previously reported, in May 2020, the Ukrainian Ministry of Digital Transformation (MDT) carried out a public consultation in relation to the draft text for a law relating to virtual assets. On September 16, 2020, the Ukrainian Parliament registered the draft law “On Virtual Assets” (the “Draft Law,” available here in Ukrainian). One significant change brought about by the public consultation is that the Draft Law now defines a virtual asset as a separate…

On August 20, 2020, three Swiss companies, 21 Analytics, Crypto Finance AG, and Mt. Pelerin, conducted a live demonstration of a Bitcoin transaction valued at US$23 million. The transaction between Crypto Finance and Mt. Pelerin was powered by 21 Analytics’ regtech, and ran over Swiss FATF travel rule system OpenVASP and the TRP, another institution-focused solution led by ING Bank. The transaction is reported to be the first cryptocurrency transaction in Switzerland that automated full…

Two firms – cryptocurrency mining pool Simplecoin and bitcoin gaming platform Chopcoin – are shutting down as a result of the upcoming EU anti-money laundering rules.   AMLD5, the EU’s 5th anti-money laundering directive, will come into effect on January 10, 2020.  Among the changes AMLD5 brings about are an expanded scope for regulation regarding crypto platforms and wallets, centrally determined obligations for performing AML due diligence, stricter identification requirements for pre-paid card purchases, and the end…

Implementation of the EU’s Fifth Money Laundering Directive on 10 January 2020 is now fast approaching. To the Financial Conduct Authority’s long list of responsibilities has been added the role of anti-money laundering (AML) supervisor of UK crypto-asset businesses. With this in mind, the FCA has published a new webpage setting out key information for businesses. This includes the crypto-asset activities likely to fall within scope although these will not be definitely known until HM Treasury publishes…

On August 20, 2019, the Swiss Banking Association (“SBA”) released guidelines for member banks (in German with Italian, French and English versions to follow) about opening company accounts for companies with a nexus to distributed ledger technology (“DLT”).  These guidelines update the SBA’s guidelines from  September 21, 2018. The guidelines outline what banks should require of DLT-nexus companies in the account opening process to address risk management related to issues such as anti-money laundering (“AML”).…

During a speech at Consenus 2019, Sigal Mandelker, the U.S. Treasury’s Under Secretary for Terrorism and Financial Intelligence, reiterated the projection that the Financial Action Task Force (“FATF”) will adopt international standards for cryptocurrency-based services in June 2019.  FATF (also known by its French name, Groupe d’action financière) is an independent inter-governmental body that develops global standards for anti-money laundering and counter-terrorist financing. In 2014 and 2015 FATF began expressing concerns that the potential benefits…

On April 8, 2019, Jacob Burrell Campos of Rosarito, Mexico, was sentenced to two years in prison and to forfeit USD 823,357 in illicit profits for operating an unlicensed money transmitting business in connection with his sale of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States.  Burrell, a U.S. citizen, pleaded guilty, admitting that he operated a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN)…

We have previously written about New York’s BitLicense regulations, which prohibit companies from engaging in “virtual currency business activity” in New York, or with New York residents, without a license.  Bittrex, based in the State of Washington, is one of the more established cryptocurrency exchanges.  On April 10, 2019, the New York State Department of Financial Services (“DFS”) published a letter denying Bittrex’s BitLicense application. According to the DFS press release, the application was denied primarily…