NY DFS Seal CircleThe New York State Department of Financial Services (“DFS”) has issued its fifth BitLicense to date, continuing a marked effort to bring legitimacy and controls to the virtual currency (“VC”) industry, whose advantages in lowering costs and creating efficiencies have been marred with concerns of nefarious use.

Founded in 2012, Coinbase, Inc. operates as a digital currency exchange and is perched at the top of well-funded startups in the VC industry. Its BitLicense signifies an important milestone in the company’s nearly two-year, multi-state licensing strategy. In the same vein, the fact that a VC market-leader has sought after and is now approved to do business in New York is an equally important occasion for the BitLicense program itself. Continue Reading Coinbase the Latest to Obtain New York BitLicense

House and cashThe field of forfeiture saw significant action in 2016. The IRS offered to return forfeited funds used in structuring, but Congress still may clip its ability to forfeit such funds. Meanwhile, DOJ renewed a controversial program that incentivizes local law enforcement to aggressively pursue forfeiture. It filed a major forfeiture action which reminds law firms of their own need to vet the source of funds flowing into firm bank accounts. Finally, the U.S. Supreme Court made it clear that “clean” funds cannot be restrained pretrial when a defendant needs those funds for his criminal defense, even if the government wants to restrain the money in order to pay for forfeiture or restitution if the defendant is convicted. Continue Reading 2016 Year in Review: Forfeiture

2016 was a busy year for developments in Anti-Money Laundering (AML), the Bank Secrecy Act (BSA), the criminal money laundering statutes, forfeiture, and related issues. In part one of our year-in-review, we discuss six key topics:

  • The Panama Papers and its spotlight on the United States as a potential money laundering haven

You can read more about these topics areas in the blogs that follow. Click here to read the full article 2016 Year in Review: Money Laundering (Part One).

The New York State Department of Financial Services (NYDFS) emerged in 2016 as a leader in AML enforcement by issuing new and detailed AML regulations with the unique requirement of an individual certification of compliance.

On June 30, 2016, the NYDFS finalized a new regulation setting forth rigorous standards for monitoring and filtering programs to monitor transactions for potential AML violations and block transactions prohibited by the Office of Foreign Assets Control (OFAC). The regulation, which became effective on January 1, 2017, applies to all banks, trust companies, private bankers, savings banks, and savings and loan associations chartered under the New York Banking Law (NYBL); branches and agencies of foreign banking corporations licensed under the NYBL to conduct banking operations in New York; and check cashers and money transmitters licensed under the NYBL (collectively, the Regulated Institutions). The NYDFS regulation is instructive to all financial institutions as a benchmark for future standards potentially to be issued by other states and/or federal regulators.

Continue Reading 2016 Year in Review: NYDFS Finalizes Broad AML Regulations

Capitalizing on its new AML regulations and perhaps attempting to seize the mantle of leading AML enforcement, the NYDFS announced several high-dollar value enforcement actions in 2016, all against foreign banks. For instance, on December 15, 2016, the NYDFS filed a consent order requiring Intesa Sanpaolo, S.p.A. to pay a $235 million civil monetary fine and extend the term of engagement with a NYDFS-appointed consultant for violations of the New York AML regulations.

Continue Reading 2016 Year in Review: NYDFS Fines Intesa Sanpaolo $325 Million for Alleged Repeated AML Violations

The Financial Action Task Force (FATF) highlighted in its December 2016 Mutual Evaluation Report on the United States’ Measures to Combat Money Laundering and Terrorist Financing the “excellent results” in compliance and supervision in the U.S. gaming industry during the period of 2007 to 2016. The report noted that efforts by regulators and the gaming industry have led to enhanced AML and Combating the Financing of Terrorism (CFT) compliance. The assessors specifically mentioned the efforts of the American Gaming Association (AGA), including its study, Investing in America’s Financial Security: Casinos’ Commitment to AML Compliance. The FATF report also included several recommended actions related to gaming.

Continue Reading 2016 Year in Review: FATF Report Recommends Expanding Gaming Examinations and Section 314 Efforts; Praises Progress in Gaming Industry Compliance