Tag:finance
Regulatory Scrutiny of Crypto Exchange “Binance” May Cause it to Leave the U.S.
State and federal regulators are opposing a billion-dollar deal between the cryptocurrency exchange Binance.US and the bankrupt cryptocurrency lender Voyager. The regulatory intervention is part of an ongoing struggle between Binance, the ultra-dominant cryptocurrency exchange, and U.S. regulators. Tensions between the two appear to be nearing a boiling point. The dispute also highlights an American regulatory environment that is increasingly hostile toward the cryptocurrency industry writ large, particularly in the wake of the FTX cryptocurrency exchange collapse.
The I.R.S. is using AI to Crack Down on Tax Evasion
The Internal Revenue Service (I.R.S.) issued a press release on September 8, 2023, detailing how the agency plans to use at least part of the $80 million dollar allocation it received from the Inflation Reduction Act last year. I.R.S. Commissioner Danny Werfel plans to use the funds to make compliance enforcement efforts and tax evasion identification more effective and efficient. How does he plan to do this? The overwhelmed and perhaps overworked agency will be using artificial intelligence (AI) programs and features to expedite and assist with redundant processes as well as to audit parties that are too complicated or large for the I.R.S.’s current capabilities.
Largest Alleged Violation in FEC History – Investigation Blocked, Case Closed
In June, the Federal Elections Commission (FEC) announced that they would not investigate allegations that two of former President Trump’s campaign committees illegally misreported hundreds of millions of dollars in spending. If true, these allegations would constitute the “largest alleged violation in FEC history” according to FEC Commissioner Ellen L. Weintraub. The initial complaint alleged that the committees failed to disclose payments to friends and family members of the former President, such as Lara Trump, who is Trump’s daughter-in-law, and Kimberly Guilfoyle – Donald Trump Jr.’s fiancé. In it’s decision, the FEC’s Republican Commissioners voted not to investigate the matter, which is therefore no longer being pursued. This situation illustrates how the FEC has consistently failed to investigate the Trump reelection campaign for alleged violations of campaign finance law.
Stablecoins III: The Stablecoin TRUST Act of 2022
On Wednesday, April 6, 2022, Senator Pat Toomey of Virginia released a discussion draft of the Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022, also known as the Stablecoin TRUST Act (“the TRUST Act”). This new legislation, introduced in the United States Senate, aims to create a three-pronged regulatory framework for the issuers of stablecoins in the United States. Like similar bills on the topic of stablecoin, such as the Stablecoin Innovation and Protection Act of 2022, the bill is short at only fourteen pages long. Where the bills differ is immediately noted in the more robust definitions section of the TRUST Act which lays out a six-part definition of “payment stablecoins” that covers the design intent of a stablecoin, who can issue a stablecoin, whether the holder can inherently earn interest, and where the stablecoin transactions are recorded.
OFAC Publishes New Guidelines Regarding the Russia Investment Ban
On June 6, 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) released new and revised guidelines regarding the Russian investment ban established by Executive Orders 14071, 14066, and 14068. As a result of the executive orders, sanctions can be imposed on individuals or entities determined to have operated in the accounting, trust and corporate formation services, or management consulting sectors of the Russian Federation economy. OFAC has consistently been updating and revising the guidelines to keep the guidelines as clear and consistent as possible, in an attempt to keep Americans doing business in Russia out of legal trouble.
SEC Looks to Modernize the Fund Names Rule
On May 25th, 2022, the Securities and Exchange Commission (SEC) issued a proposal to the Investment Company Act of 1940 Rule 35d-1 which expands on a rule that mostly regulates fund names. The SEC has decided to take these measures to combat “greenwashing”; a marketing ploy used by fund investors to draw in socially conscious investors for investments that are anything but sustainable. The SEC believes investors lack comparable, consistent, reliable information on ESG products. This article will discuss these new proposals and what they mean for important stakeholders.
Financial Institutions and the Financing of Emissions: How Firms are Addressing the Climate Emergency Through Net Zero Emission Initiatives.
Megan Aldworth Associate Editor Loyola University Chicago School of Law, JD 2023 While our world economy is driven by commerce, over the last few decades, it has become apparent that along with driving the economy, commerce is driving our planet into a state of emergency. According to the UN Secretary-General, “the climate emergency is …
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Coinbase Global Inc. Settlement Raises More Questions for Financial Regulators
On January 4th, 2023, the New York State Department of Financial Services made public that a $100 million settlement with the cryptocurrency exchange Coinbase Global Inc. (Coinbase) has been agreed to. The settlement follows an enforcement action imposed this past August aiming to regulate cryptocurrencies. With a lot of discussion happening given the recent collapse of FTX and anti-money laundering violations by Robinhood Markets, this action begs the question: should the digital currency industry be regulated nationwide and, if so, what should these regulatory agendas look like?
Deutsche Bank Reorganization Results in New Compliance Chief
Deutsche Bank, the multinational investment banking and financial services company, will name Laura Padovani as its new Chief Compliance Officer. The move comes as part of a broader reorganization in the company’s compliance division, taking place in the aftermath of regulatory investigations in the United States and Germany. The regulatory investigations of Deutsche Bank over the last several years concern the organization’s questionable practices as it relates to money laundering and other offenses. The investigations also involve massively high-profile individuals, such as Jeffrey Epstein and Donald Trump.
Challenges and Opportunities in Regulating Cryptocurrency
Many nations are increasingly attempting to regulate Bitcoin and other forms of cryptocurrency. Increased regulation could help legitimize the currency, but uncertainties about what regulation lies ahead threatens the value of the currencies. A main driver of the increased value of cryptocurrencies is the potential for increased usage in markets globally and greater integration of them into our economy. Regulation may be essential to successfully enabling such integration, because with instability in trade and valuation of the currency it is hard for consumers to know whether they should be spending the currency, or if it will dramatically change in value over the course of a short time period.