CUBE RegNews June 2023 summary

Stay informed with our monthly regulatory and compliance recap, providing you with a comprehensive overview of the latest regulatory events. For daily updates, check out our RegNews summaries here.

Enforcement

Crypto was in the crosshairs at the start of June with the SEC charging giants Binance and Coinbase with numerous offences. Later in the month, CoinEx was prohibited from opening any new accounts in the US following intervention by New York Attorney General, Letitia James. This latest activity adds to the regulatory action against Beaxy, OneCoin, CoinDeal and ChipMixer amongst others, that has been seen against crypto businesses since the start of the year. 

The regulators waded in: SEC chair Gary Gensler noted “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones”; the FCA announced a clampdown on crypto marketing and the CFTC chair called for greater regulation of crypto.  

Two $3m fines were handed out in the month: against a former Wells Fargo exec and against ESSA Bank & Trust but one of the largest fines imposed was on ED&F Man Capital Markets who were charged more than £17 million by the FCA for serious compliance failings. In Singapore a quartet of banks were fined by MAS for AML/CFT failings.  The SEC also fined audit firm Marcum LLC $10 million for quality control failings and JP Morgan was fined $4million for a record-keeping failure which led to approximately 47 million electronic communications in around 8,700 electronic mailboxes. 

Consultations

The European Banking Authority announced a consultation to review AML risks for crypto asset providers;  MAS announced a plan to create a common protocol for digital money; and French regulator AMF announced a DeFi consultation. 

Away from crypto, the CFTC announced a risk management program consultation and the Australian regulator announced a major overhaul of its payment systems regulation. 

A flurry of 2022 annual reports were published in June including EIOPA;  ESMA; EBA and the SFC in Hong Kong.  The European Supervisory Authorities also issued a joint consultation on DORA. 

FINRA announced a consultation on its liquidity rule, proposing a new rule which is intended to ensure that members have sufficient liquid assets to meet their funding needs in both normal and stressed conditions. 

Policies and Procedures

The SFC issued new guidelines for virtual asset trading platform providers. The guidelines are applicable to all platform operators (whether they are licensed under the SFO and/or the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) when they carry on relevant activities. 

The FCA confirmed it is banning debt packager firms from receiving remuneration from debt solution providers.  

The Securities and Exchange Commission (SEC) adopted new rules to prevent fraud, manipulation, and deception in connection with security-based swap transactions. 

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