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☆ Rio Tinto to Pay SEC $15 Million Over Foreign Bribery Charges
▼ + stars: | 2023-03-06 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

Mining and metals company Rio Tinto PLC agreed to pay a $15 million civil penalty to settle a yearslong probe into allegations it violated U.S. foreign bribery law, the Securities and Exchange Commission said Monday. The payments allegedly made by Rio Tinto have prompted multiple corruption investigations in the U.S., U.K. and Australia. Rio Tinto PLC’s American Depositary Shares trade on the New York Stock Exchange. The SEC credited Rio Tinto for cooperating with the investigation by providing documents in a timely manner and for making its employees available for interviews. Rio Tinto consented to the SEC’s order without admitting or denying the findings.

☆ Ericsson Compliance Chief to Leave as Company Remains Under U.S. Scrutiny
▼ + stars: | 2023-02-28 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

Ericsson AB said its chief compliance officer will leave the company, as the telecommunications-equipment company continues to clean up its ethics and compliance programs following a bribery settlement. Laurie Waddy, who joined Stockholm-based Ericsson in April 2019 as compliance chief, will leave the company after almost four years, the company said Tuesday. Jan Sprafke, Ericsson’s head of compliance for Europe and Latin America, will become interim compliance chief while the company searches for a permanent successor. Mr. Sprafke will report to the company’s chief legal officer and the board’s audit and compliance committee. Ms. Waddy will work with Mr. Sprafke during the transition on issues related to the compliance functions and the company’s U.S.-mandated monitorship, according to Ericsson.

☆ Global Financial Watchdog Suspends Russia’s Membership
▼ + stars: | 2023-02-24 | by ( Mengqi Sun | ) www.wsj.com time to read: +4 min

A global financial watchdog, in an unprecedented move, suspended Russia’s membership in the organization, on the first anniversary of the Kremlin’s invasion of Ukraine. FATF said Russia’s war in Ukraine is a violation of the group’s principles to promote security, safety and the integrity of the global financial system and breaks with FATF’s commitment to international cooperation and mutual respect. Russia’s suspension from FATF significantly restrains the country’s influence on any FATF decisions while casting a shadow on its business climate, observers said. Russia, however, remains liable for membership dues if it intends to reapply for membership in the future. “The measure is both an important political statement as well as a recognition of the threats to the global financial system posed by Russia.

☆ Crypto Company CoinEx Sued by New York Over Failure to Register
▼ + stars: | 2023-02-23 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

The New York attorney general’s office has sued cryptocurrency platform CoinEx, alleging it failed to register as a securities and commodities broker-dealer and misrepresented itself as a crypto exchange. But New York prosecutors said CoinEx isn’t registered with the U.S. Securities and Exchange Commission or designated by the Commodity Futures Trading Commission as an exchange, as required by New York state law. The office of New York Attorney General Letitia James said its prosecutors also were able to buy and sell crypto on CoinEx in New York, despite the fact the company isn’t registered in the state. New York law requires securities and commodities brokers to register with the state to do business there. The suit, announced Wednesday, is the latest action by the New York attorney general in policing the crypto sector and using the state’s laws to protect investors.

☆ Binance Hires Gemini Executive as Chief Compliance Officer
▼ + stars: | 2023-02-14 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

Binance said Noah Perlman has joined as its chief compliance officer from rival Gemini Trust Co., as the cryptocurrency exchange continues to beef up its legal and compliance team amid regulatory scrutiny. Mr. Perlman joined Binance last month after serving as Gemini’s chief operating officer for more than two years. He joined Gemini as its chief compliance officer in 2019. Mr. Perlman’s appointment ends a monthslong search for a compliance chief at Binance, which over the past year or so has been bolstering its compliance team head count. Binance Chief Executive Changpeng Zhao, known as CZ, said on Twitter in September that the exchange planned to hire a few hundred more compliance people.

☆ U.S. Exempts Earthquake Aid to Syria From Sanctions
▼ + stars: | 2023-02-10 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

Funds sent to Syria for earthquake relief that might otherwise be barred by U.S. sanctions are exempted for about six months, the U.S. Treasury Department said. The Treasury’s Office of Foreign Assets Control, which implements and enforces U.S. sanctions, issued a general license Thursday night allowing U.S. banks and money transmitters to process transactions to and from Syria if they are intended for earthquake aid. The language is seen as providing more protection to financial institutions processing the transactions, sanctions experts said. Paul Carroll, director of the Charity & Security Network, a resource and advocacy center for nonprofit organizations, said delivering aid to Syria also faces logistical challenges. “The obstacles to getting aid to Syria [for earthquake relief] is more about parties, the bad and good guys, than about the sanctions themselves,” Mr. Carroll said.

☆ U.S. to Remove Sanctions on Former Kazakhstan Subsidiary of Russia’s Sberbank
▼ + stars: | 2023-02-07 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

The U.S. Treasury Department said it would remove sanctions imposed on a former Kazakhstan subsidiary of Russia’s Sberbank because the entity is now wholly owned by a Kazakh company. The entity, previously called Subsidiary Bank Sberbank of Russia Joint Stock Co., is a commercial bank in Kazakhstan and was sanctioned as a foreign subsidiary of Sberbank last February, after Russia’s invasion of Ukraine. The unusual step made by the U.S. to remove the former subsidiary from the sanctions list highlights the impact of sanctions on Russia as Sberbank was forced to divest itself of some assets. PREVIEWThe U.S. imposed sanctions on Sberbank, Russia’s largest bank, in an effort to cripple Russia’s economy, military and elites after Moscow’s Ukraine invasion. The former Sberbank subsidiary is one of the largest banks in Kazakhstan and is seen as systemically important to Kazakhstan’s financial sector, a Treasury spokesperson said.

☆ Trader Is Charged in Alleged $110 Million Crypto Manipulation Scheme
▼ + stars: | 2023-02-02 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

He faces charges of commodities fraud, commodities market manipulation and wire fraud in connection with what prosecutors said was manipulation of Mango Markets. Mr. Eisenberg remained in police custody on Thursday and will be arraigned Feb. 14, when he would be asked to enter a plea. PREVIEWThe Securities and Exchange Commission and the Commodity Futures Trading Commission filed parallel civil charges against Mr. Eisenberg last month. The CFTC, which regulates derivatives markets, said the enforcement action against Mr. Eisenberg was the first of its kind against an alleged manipulation scheme involving a decentralized exchange. He allegedly artificially pumped up the price of MNGO on three different digital asset exchanges that Mango Markets used to determine the value of the derivative contracts.

☆ Wagner Group Designated by U.S. as Transnational Criminal Group
▼ + stars: | 2023-01-27 | by ( Mengqi Sun | ) www.wsj.com time to read: +4 min

The U.S. took action Thursday against Russian private military group Wagner Group, designating it as a significant transnational criminal organization over its actions in combat operations in Ukraine on behalf of President Vladimir Putin. The U.S. Treasury Department said Wagner Group personnel also are involved in alleged ongoing criminal activity, including mass executions, rape and physical abuse in the Central African Republic and Mali. Thursday’s sanctions come after the White House said last Friday it would designate the Wagner Group as a transnational criminal organization. The Wagner Group has already been sanctioned by Canada, Australia, Japan, the U.K. and the European Union. Representatives for Wagner Group didn’t immediately respond to a request for comment.

☆ Crypto Exchange Kraken Names New Compliance Chief After Months of Searching
▼ + stars: | 2023-01-24 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

Cryptocurrency exchange Kraken said it named CJ Rinaldi as its new chief compliance officer, hiring him from rival Blockchain.com, as it continues to revamp its compliance program after a sanctions violation settlement amid increasing regulatory scrutiny of the crypto sector. Mr. Rinaldi most recently served as Blockchain.com’s chief compliance officer for about a year, where he implemented global compliance frameworks and mitigated compliance risks. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. As part of the agreement, Kraken will invest $100,000 in its sanctions compliance controls, which include training and technical measures. Kraken also hired a new chief financial officer and new chief marketing officer last year.

☆ Deutsche Bank Names New Compliance Chief as Part of Reshuffle
▼ + stars: | 2023-01-19 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

Laura Padovani will join Deutsche Bank on April 1 as its group chief compliance officer and head of compliance, according to a memo seen by The Wall Street Journal. Ms. Padovani spent seven years at Barclays, most recently as its compliance chief, and 20 years at American Express. Mr. Tagné, who has spent more than six years at Deutsche Bank, will also take on the role of deputy chief compliance officer, according to the memo. Germany’s top financial watchdog, BaFin, in November threatened to fine Deutsche Bank if it didn’t implement controls against money laundering by mid-2023. Deutsche Bank was fined $150 million in 2020 by the New York Department of Financial Services for failing to properly monitor its dealings with Epstein.

☆ Crypto Platform Bitzlato Charged With Laundering More Than $700 Million of Illicit Money
▼ + stars: | 2023-01-18 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

U.S. authorities designated cryptocurrency exchange Bitzlato Ltd. as a primary money-laundering concern and charged its founder for allegedly facilitating money laundering for criminals. The Treasury Department designated Bitzlato under a section of the USA Patriot Act, a law used to combat money laundering and terrorist financing, for allegedly laundering illicit funds for ransomware actors based in Russia. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. Bitzlato also received more than $15 million of ransomware proceeds, the Justice Department said. “Today the Department of Justice dealt a significant blow to the cryptocrime ecosystem,” Deputy Attorney General Lisa Monaco said Wednesday.

☆ Sam Bankman-Fried Says Law Firm Worked Closely With FTX Before Bankruptcy
▼ + stars: | 2023-01-13 | by ( Mengqi Sun | ) www.wsj.com time to read: +5 min

Sam Bankman-Fried said cryptocurrency exchange FTX had a closer relationship than previously disclosed with its bankruptcy law firm Sullivan & Cromwell LLP, adding to questions about the law firm’s work for past FTX management. Mr. Bankman-Fried is currently under house arrest at his parents’ California home as he faces federal fraud charges. Sullivan & Cromwell was one of two primary law firms FTX International used before the bankruptcy and it was FTX U.S.’s main law firm, Mr. Bankman-Fried wrote in a post Thursday on Substack, an online subscription-based newsletter platform. He added that FTX U.S.’s general counsel was a former member of the law firm without naming him. The new FTX CEO would also be in charge of the bankruptcy process that later picked the law firm as the bankruptcy counsel.

☆ Lawyers Expect More Anti-Money-Laundering Whistleblowers Thanks to Legislation
▼ + stars: | 2023-01-12 | by ( Mengqi Sun | ) www.wsj.com time to read: +4 min

The Treasury Department’s anti-money-laundering whistleblower program, which was established in 2021 but has been viewed as lacking teeth, got a shakeup in the recent omnibus spending bill that lawyers predict will result in more whistleblower cases. The 2021 defense bill establishing the program laid out a maximum 30% cut for the whistleblower but listed no minimum. The new legislation also sets up a revolving fund at the Treasury Department used to pay whistleblowers with money collected from enforcement actions based on their tips. The overhauled whistleblower program will strengthen FinCEN’s enforcement capability, said Jason Zuckerman, a whistleblower lawyer at Zuckerman Law in Washington. “Creating a credible anti-money-laundering whistleblower program will encourage whistleblowers to come forward.”Write to Mengqi Sun at mengqi.sun@wsj.com

☆ Risk Management at Crypto Firms Is in Focus Following FTX Collapse
▼ + stars: | 2023-01-09 | by ( Mengqi Sun | ) www.wsj.com time to read: +7 min

Cryptocurrency companies are disclosing more information about their internal controls and risk management following the collapse of FTX, but a level of transparency in the industry that would make many investors feel comfortable remains far off. Jeff Horowitz, BitGo chief compliance officer Photo: Jeff Horowitz“We need better risk management, more guardrails…and we need some of that installed into the crypto industry,” said Jeff Horowitz, chief compliance officer at crypto custodian BitGo. Although most crypto firms aren’t subject to formal federal regulation, many have adopted the enterprise-risk-management programs that U.S. watchdogs require of mainstream financial institutions in the wake of the 2008 financial crisis. As the crypto industry matures, these executives said it is important for investors and consumers to check for signs of adequate risk management and compliance measures at crypto firms. Other signs include whether the company engages in outside due diligence, whether assets are segregated and how secure crypto assets passwords are kept.

☆ Judge Orders Cruise Companies to Pay More Than $436 Million for Docking at Seized Terminal in Cuba
▼ + stars: | 2023-01-07 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

Four major cruise lines say they will appeal a recent ruling that would force them to pay roughly $436 million in total damages to a company that owned a port terminal in Havana prior to the Cuban Revolution. The ruling in favor of Havana Docks Corp., owner of the Havana Cruise Port Terminal before the Cuban revolution, marked an important milestone for Cuban-Americans seeking compensation for property confiscated by the Castro regime. Mickael Behn, a descendant of the original owners of Havana Docks. The verdict in favor of Havana Docks is the first from a district court, the data shows. The ruling comes after the judge in the case, Beth Bloom, signaled last March that she agreed that the use of the Cuban port constituted trafficking in confiscated property owned by Havana Docks.

☆ New York Financial Regulator Notches $100 Million Settlement With Coinbase
▼ + stars: | 2023-01-05 | by ( Mengqi Sun | ) www.wsj.com time to read: +4 min

A $100 million settlement made public by the New York State Department of Financial Services on Wednesday underscores the agency’s intent to set the regulatory agenda for digital currencies. Coinbase also will spend $50 million to improve its compliance program over the next two years. The regulator oversees insurance companies and state-chartered banks and already plays an outsize role nationally in overseeing the financial services sector. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. The agency credited Coinbase for its remediation efforts, including how it strengthened its onboarding process, according to the settlement agreement.

☆ So You Worked for FTX. Now What? Advice From Recruiters and Employers
▼ + stars: | 2023-01-02 | by ( Mengqi Sun | ) www.wsj.com time to read: +5 min

Former employees of FTX and other failed crypto firms will likely face extra scrutiny in their job hunt. While not all of the failed firms are associated with fraud allegations like FTX, anyone who worked at these businesses could face a tough slog finding their next job. “I worked with plenty of compliance folks who came from Lehman Brothers…Is it gonna be career-ending for some people? “People who you worked with that can vouch for you can bolster and can set you apart,” Mr. Brown said. Candidates also need to practice how to separate themselves and their own work experience and accomplishments from the firm they worked at, recruiters and hiring managers said.

☆ Whistleblower in Healthcare Bribery Case Won the Largest SEC Award This Year
▼ + stars: | 2022-12-19 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

The U.S. Securities and Exchange Commission has awarded more than $37 million to an individual for reporting information about a bribery scheme at a large European healthcare company. The sum is the highest award paid out to a single whistleblower so far this calendar year and one of the top 10 largest awards ever paid out by the SEC’s whistleblower program to an individual, according to the SEC. The SEC has given out more than $1.3 billion of awards since the beginning of its whistleblower program, which was created by the 2010 Dodd-Frank Act, according to the report. But lawyers representing the whistleblower said the award was connected to a Foreign Corrupt Practices Act settlement reached by a publicly traded European healthcare company with the SEC and the Justice Department. “The SEC whistleblower program has hit its stride and is generating high-quality disclosures that supercharge enforcement of the securities law and protect investors,” he said.

☆ New York Financial Regulator Issues Crypto Guidance for Banks
▼ + stars: | 2022-12-15 | by ( Mengqi Sun | ) www.wsj.com time to read: +4 min

New York’s financial regulator said banks looking to enter the cryptocurrency space need to first seek approval from the regulator. U.S. banks and foreign banks with branches in New York that are under NYDFS supervision should notify the agency at least 90 days before starting any new or significantly different crypto-related activities, according to the guidance. NYDFS is one of the first state financial regulators to issue such guidance for banks. PREVIEWNYDFS Superintendent Adrienne Harris said the guidance is needed as the traditional financial institutions continue to innovate and as the crypto market evolves over time. New York’s financial regulator, which oversees insurance companies and state-chartered banks, already plays an outsize role nationally in overseeing the financial services sector.

☆ Crypto Exchange Kraken Settles Alleged Sanctions Violations
▼ + stars: | 2022-11-28 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

Cryptocurrency exchange Kraken has agreed to pay more than $362,000 to settle allegations it violated U.S. sanctions against Iran, the U.S. Treasury Department said Monday. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. PREVIEWKraken will invest $100,000 in its sanctions compliance controls as part of the settlement agreement, which includes training and technical measures. Kraken failed, however, to set up IP address blocking on transaction activity across its platform, according to the Treasury Department. Cryptocurrency exchange Bittrex Inc. in October agreed to pay $29 million to the department to settle allegations that it violated sanctions and anti-money-laundering laws.

☆ FTX Hires Ex-Regulators to Investigate Firm’s Collapse
▼ + stars: | 2022-11-23 | by ( Mengqi Sun | ) www.wsj.com time to read: +5 min

Cryptocurrency exchange FTX, whose recent collapse has led to questions about lacking regulatory oversight, has hired a fitting team to help untangle the mess: former senior U.S. regulators. FTX said this week it has been in contact with investigators, The Wall Street Journal previously reported. FTX, which is based in the Bahamas, also has hired Nardello & Co., an investigations firm that specializes in anti-corruption and fraud cases, Mr. Bromley said in court Tuesday. The name of the cybersecurity company wasn’t disclosed because of concerns over continuing cyberattacks on FTX, he said. The collapse of FTX has set off the largest crypto-related bankruptcy ever, and court filings are already shedding light on what went wrong and how complicated things could get.

☆ Treasury Warns Crypto Industry of Money-Laundering Risks in ‘Mixers’
▼ + stars: | 2022-11-21 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

The cryptocurrency industry must follow the U.S. Treasury Department’s anti-money-laundering and sanctions regulations to prevent bad actors from abusing platforms known as “mixers” to launder illicit funds, a senior official said. Crypto-industry participants have raised questions over the sanctions being imposed on Tornado Cash, a platform based on open-source, self-running software protocols. Some in the decentralized finance community have expressed concerns about what they see as excessive government pressure on the industry. Some, including Coinbase Global Inc. and industry advocacy groups, have sued the Treasury, alleging the action against Tornado Cash infringes on Americans’ privacy and First Amendment rights. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance.

☆ Top Employee of Crypto Exchange BitMEX Sentenced Over U.S. Charge
▼ + stars: | 2022-11-17 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

A top employee at cryptocurrency derivatives trading exchange BitMEX was sentenced to 12 months probation Wednesday in federal court in Manhattan after pleading guilty to violating U.S. anti-money-laundering rules. U.S. prosecutors alleged Mr. Dwyer and the exchange’s founders failed to implement anti-money-laundering and know-your-customer programs, as required by U.S. law. Under the plea agreement, Mr. Dwyer also agreed to pay $150,000 in fines. “The government’s heavy-handed approach with respect to the prosecution of Mr. Dwyer is regrettable, and Mr. Dwyer is relieved to have this matter behind him and looks forward to getting on with his life, both personally and professionally,” a spokesperson for Mr. Dwyer said in an email Thursday. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance.

The SEC filed 760 enforcement actions in the year ending Sept. 30, up 9% from the year before, according to the agency’s annual enforcement report, which was made public Tuesday. The SEC imposed a total of $6.44 billion in monetary penalties, the highest amount on record and 67% above the previous year. That made it the second-highest year for both the number of awards and dollar amounts of awards issued, the SEC said. PREVIEWThe SEC whistleblower program in August reversed a Trump-era change that would have put a limit on the amount of awards it could provide. The SEC said it was focusing on actions that would deter future violations while encouraging accountability from major institutions.

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