The session will focus on the issues raised by cryptocurrency exchanges during the onboarding process for banks, including:
- Customer risk: In addition to the risks that MSBs pose to banks such as the four pillars of an AML program, particularly their policies and procedures as well as their compliance staff, crypto exchanges have unique risks relating to (a) the types of coins that they accept; (b) their interactions with other exchanges, including mixers and tumblers; (c) whether they have a home office and home regulator; (d) whether they are a BTM company and/or an operator of BTMs; (e) the profile of their customers; and (f) the current climate for crypto.
- Geographic risk: (a) Is the exchange doing business in all 50 states; (b) are they licensed; (c) do they have a NY DFS BitLicense; (e) are they located in a HIFCA/HIDTA; (f) are they foreign-owned, and if so, located in a high risk country; and (g) do they even have a home location.
- Product/service risk: What are the demands on the bank from the exchange?
What other considerations govern the exchange’s relationship with the bank, including:
- Regulatory enforcement actions against banks for improperly dealing with exchanges;
- Regulatory and criminal enforcement actions against exchanges that raise red flags; and
- Red flags noted by FinCEN and other authorities.
1 ACAMS Credit
Please note that CAMS credit for this virtual event is available to members of the Chapter only.