FinCEN and Federal Reserve Seek Comments on Proposed Amendments to the Recordkeeping and Travel Rules

On October 23, 2020, the Board of Governors of the Federal Reserve System (the ‘‘Board’’) and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) (collectively, the “Agencies”) issued a joint Notice of Proposed Rulemaking (“NPRM”) soliciting public comment on questions relating to potential amendments to Bank Secrecy Act (“BSA”) regulations. The proposed amendments seek to modify the existing Recordkeeping Rule and Travel Rule by: Lowering the requirement to collect, retain, and transmit information on funds transfers and transmittals of funds from $3,000 to $250 for transactions that begin or end outside the United States; and Superseding the existing definition of money to include convertible virtual…

0 Comments

FinCEN Imposes First of its Kind Civil Penalty against Cryptocurrency Money Service Business

On October 19, 2020, the Financial Crimes Enforcement Network (FinCEN) released its assessment of a $60 million civil monetary penalty against the operator of two cryptocurrency “mixers” for violations of the Bank Secrecy Act (“BSA”).[1] The action marks the first effort by FinCEN to target the use of these “mixers” to facilitate money laundering and demonstrates FinCEN’s ongoing commitment to regulate entities that transmit cryptocurrencies as money service businesses (“MSBs”) under the BSA.[2] Factual Background: The action concerned Larry Dean Harmon (“Harmon”), a vendor on the “dark web” who operated a search engine, Grams. Grams allowed users to access and search the onion router network, commonly known as…

0 Comments

DOJ Prioritizes Health Care Fraud in the Pandemic

The Department of Justice (“DOJ”) recently announced its largest ever health care fraud and opioid enforcement action.  In a coordinated effort, DOJ charged 345 defendants with more than $6 billion in fraud losses for submitting false and fraudulent claims to federal health care programs and private insurers. The nationwide enforcement operation has been in motion since April and is the product of inter-agency cooperation between the Criminal Division, Fraud Section’s Health Care Fraud Unit, the Health Care Fraud and Appalachian Regional Prescription Opioid (ARPO) Strike Force program, local U.S. Attorneys’ Offices, HHS-OIG, FBI, and DEA. While the opioid crisis has long been a target of federal prosecutors, it…

0 Comments

4 Compliance Tips Amid Increased Ransomware Scrutiny

In light of two new US Treasury Department advisories signaling increased oversight of ransomware payments, victim companies and their third-party response teams considering making payments should follow certain due diligence and compliance best practices, write Colin Jennings, Ericka Johnson, Dylan Yépez and Elizabeth Weil Shaw in an article for Law360. Source link

0 Comments

Cryptocurrency Exchange and its Executives Face Allegations of Failing to Maintain an Adequate AML Program

Two U.S. authorities recently announced actions against four individuals and numerous entities associated with BitMEX, an online trading platform for futures contracts and other derivative products tied to the value of cryptocurrencies.  Both actions allege that BitMEX failed to put in place required anti-money laundering programs and procedures, and serve as a reminder that institutions offering new and innovative financial products should assess the potential applicability of and compliance with U.S. anti-money laundering laws and regulations. BitMEX’s Background According to the court filings, BitMEX has described itself as the world’s largest cryptocurrency derivatives platform in the world.  Among other offerings, BitMEX offered commodity futures, options, and swaps on…

0 Comments

Ransomware Payments can lead to Sanctions and Reporting Obligations for Financial Institutions

With cybercrime on the rise, two U.S. Treasury Department components, the Office of Foreign Assets Control (“OFAC”) and the Financial Crimes Enforcement Network (“FinCEN”), issued advisories on one of the most insidious forms of cyberattack – ransomware. Ransomware is a form of malicious software designed to block access to a system or data.  The targets of ransomware attacks are required to pay a ransom to regain access to their information or system, or to prevent the publication of their sensitive information.  Ransomware attackers usually demand payment in the form of convertible virtual currency (“CVC”), which can be more difficult to trace.  Although ransomware attacks were already on the…

0 Comments

FinCEN Director Blanco Encourages Increased Communication During Global Pandemic

In remarks to the Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Kenneth A. Blanco, the Director of the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”), covered a number of high-priority topics, including FinCEN’s response to the pandemic, the latest COVID-19 related fraud schemes, emerging cyber threats, virtual currency issues, and important regulatory updates.  A theme throughout his speech was FinCEN’s commitment to increased and meaningful communication with the entities it regulates. COVID-19 Related Fraud Blanco began by sharing that, in response to the pandemic, FinCEN aligned its strategic efforts to assist financial institutions in preventing COVID-related fraud.  In particular, the agency has responded to hundreds of inquiries relating…

0 Comments

SEC Approves Changes to Its Whistleblower Program

This week, in a 3-2 vote, the U.S. Securities and Exchange Commission (“SEC” or the “Commission”) approved significant changes to the rules governing its whistleblower program.  The program, established by the Dodd-Frank Act in 2011, incentivizes those with information about possible securities law violations to report to the SEC.  If the tipster provides “high-quality original information” that leads to an enforcement action where monetary sanctions exceed $1 million, the SEC will award a bounty equal to 10 to 30 percent of the sanctions.  According to the SEC, whistleblower reports have already led to enforcement actions ordering over $2.5 billion in financial remedies and resulting in more than $500…

0 Comments