FTX and crypto assets in general are under the microscope again this week − but from a couple of different perspectives: criminal liability based on “aiding and abetting” and the need for additional regulatory clarity.
We suspect that we will be writing about and talking about crypto for a long time, so we welcome you to join the crypto conversation. Just drop us a line here.
Daniel Meade
Editor, Cabinet News and Views
The rolling collapse in crypto and digital assets’ markets, and particularly a series of criminal complaints and enforcement actions in the wake of FTX’s and its sister company Alameda’s bankruptcies, are testing and providing valuable guidance on various Commodity Futures Trading Commission enforcement theories under the Commodity Exchange Act. One such cause of action, the aiding and abetting in commission of fraud, was recently articulated in the CFTC v. Nishad Singh proposed consent order.
This week, Acting Comptroller of the Currency Michael Hsu delivered remarks, titled “Trust and Global Banking: Lessons for Crypto,” at the Institute of International Bankers’ Annual Washington Conference in which he discussed the lack of consolidated supervision and coordination among regulators as part of the problem with the failure of crypto exchange FTX. He also offered lessons that can be learned from how bank supervision responded to the failure of the Bank of Credit and Commerce International 30 years ago.
On March 2, the Department of Commerce, Department of Justice, and Department of the Treasury issued a Tri-Seal Compliance Note warning companies to be vigilant for Russia-related sanctions evasion. The Note sets forth a clear regulatory expectation that businesses “of all stripes,” both inside and outside the U.S., maintain effective compliance programs to minimize the risk of evasion.
The EU executive responsible for financial services has indicated that the process of finalisation of a memorandum of understanding on regulatory cooperation in financial services can restart once the UK has implemented the agreed-on deal on trading relations with Northern Ireland, known as the Windsor Framework.
Under a proposed amendment to the UK’s Financial Services and Markets Bill, the Prudential Regulation Authority could be empowered to review appropriate risk weighting and capital requirements associated with a financial institution’s exposure to fossil fuel exploration, exploitation and production.
