|
The Morning Risk Report: Crypto Firms Assess How to Comply With Anti-Money-Laundering Standards
|
|
|
|
|
|
|
Under new Financial Action Task Force guidelines, cryptocurrency firms must transmit customer data to other financial institutions when transferring $1,000 or more. KAREN BLEIER/AGENCE FRANCE-PRESSE/GETTY IMAGES
|
|
|
Good morning. The cryptocurrency industry is rushing to comply with new anti-money-laundering standards that require exchanges and other firms to share information about their customers, Risk & Compliance Journal’s Kristin Broughton reports.
The standards, adopted in June by the Financial Action Task Force, require cryptocurrency exchanges, some digital wallet providers and other firms to send customer data—including names and account numbers—to institutions receiving transfers of digital funds, similar to a wire transfer at a bank. The goal of the so-called travel rule is to help law enforcement track suspicious activity. The FATF is the global standard-setter for anti-money-laundering.
[Continued below...]
|
|
|
But figuring out how to comply with the standards has been something of a puzzle. Crypto firms don’t have the infrastructure in place to send customer data to each other, industry executives say. There is also the challenge of getting firms in a decentralized industry to reach a consensus on how a system for sharing information should be paid for and governed.
“Is it solvable? Yes,” said Jeff Horowitz, chief compliance officer at the digital currency exchange Coinbase. “But is there a method that exists today to share this data? No.”
|
|
|
|
From Risk & Compliance Journal
|
|
|
|
The SEC has closed a foreign bribery probe into telecom Ciena Corp. PHOTO: DENIS DOYLE/BLOOMBERG
|
|
|
The Securities and Exchange Commission has closed a foreign bribery probe into Ciena Corp., the telecommunications company said. The regulator disclosed the end of the Foreign Corrupt Practices Act investigation in a Sept. 9 letter, the Hanover, Md.-based company said in a securities filing.
In a prior securities filing, Ciena said that one of its third-party vendors had alleged that questionable payments had been made to at least one individual employed by a customer in Southeast Asia. The company conducted an internal investigation into the allegations, which corroborated that payments had been made to one such individual, Ciena had said.
|
|
|
|
North Korean leader Kim Jong Un’s willingness to talk about denuclearization may stem from a belief that the country’s cyber arsenal can partially supplant its weapons as a threat to other nations. PHOTO: KCNA/KNS/ASSOCIATED PRESS
|
|
|
New U.S. sanctions against North Korean hackers and revelations about North Korean malware show how Pyongyang’s cyber operations have become a crucial revenue stream and a security threat that soon could rival its weapons program, U.S. and industry officials say.
North Korea’s hacks of financial systems and critical infrastructure world-wide reveal sophisticated capabilities developed to counter global sanctions and expand Pyongyang’s geopolitical power, according to these officials.
The U.S. Treasury Department, in blacklisting the three hacking groups allegedly run by North Korea’s main intelligence service, said they collectively were responsible for operations across 10 countries, stealing hundreds of millions of dollars from banks and cryptocurrency exchanges, pilfering military secrets and destabilizing infrastructure.
|
|
|
-
The U.S. Treasury Department imposed sanctions on three hacking operations it says are run by North Korean intelligence services and have stolen millions from banks and others around the world.
-
Congress opened a new front in the government’s antitrust probe of giant technology firms, with House lawmakers demanding emails and other records from some of the industry’s top chief executives as they look for evidence of anticompetitive behavior.
-
A group of music publishers suing Peloton Interactive Inc. allege the company’s workout video-streaming service used more than twice as many songs without permission as they had previously claimed, and they are seeking more than $300 million in damages.
-
U.S. authorities, including the Department of Homeland Security and the Justice Department, are investigating whether certain websites have engaged in or knowingly enabled human trafficking, prostitution and money-laundering, according to people familiar with the matter.
-
PG&E said it has reached an $11 billion settlement with insurance companies over wildfire claims, a significant step toward emerging from bankruptcy.
-
Purdue Pharma LP filed for bankruptcy protection Sunday with a partial deal aimed at resolving thousands of lawsuits filed by states and municipalities accusing it of fueling the opioid crisis.
Also...
|
|
|
|
Smoke billowing after a fire at a Saudi Aramco facility in Abqaiq, Saudi Arabia, on Saturday. PHOTO: HAMAD I MOHAMMED/REUTERS
|
|
|
The loss of nearly 6% of global oil output in weekend strikes in Saudi Arabia sent crude prices soaring as officials said the kingdom was racing to restore roughly one-third of the disrupted production by day’s end Monday. The supply shock sent U.S. oil futures up about 11% to $60.98 a barrel late Sunday. Brent crude, the global gauge of oil prices, rose 13% to $68.13 a barrel. If sustained, the moves would mark some of the biggest intraday gains for crude in years and put oil prices at the highest level in months.
The damage from the attacks, a blow unlike any global oil supplies have seen since the first Gulf War, risks jolting energy markets and points to the still-pivotal role played by Saudi production. President Trump said Sunday he had authorized the release of oil from the U.S. Strategic Petroleum Reserve if needed to stabilize energy markets. The president also he had “informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States.”
|
|
|
-
Exposure to drug companies with potential liabilities stemming from widespread opioid addiction is damaging investment returns at several money managers as pain from the national drug crisis spreads. So far this month, at least five mutual-fund companies have told investors that their holdings in businesses with connections to opioid painkillers have detracted from overall returns, making money managers one of the latest sectors to feel the effects of growing attention on the addiction problem.
|
|
|
|
A smart phone user walking through London's Canary Wharf financial district in the evening light. Millions of phones may be vulnerable to a newly identified hack. PHOTO: RUSSELL BOYCE/REUTERS
|
|
|
Hackers are exploiting a vulnerability in software embedded in the SIM cards of hundreds of millions of phones to track users’ whereabouts—a novel form of spyware targeting one of the most important bits of hardware in a mobile device. AdaptiveMobile Security, a Dublin-based telecommunications-security company, said it found the technique has been used for at least two years by hackers tracking phones in Mexico, Colombia and Peru. It said the vulnerability exists, however, in SIM cards in use across a much larger swath of the world.
|
|
|
|
Brad Smith, president of Microsoft, speaking at Friday’s event. PHOTO: GARY HE/REUTERS
|
|
|
Technology companies increasingly enmeshed in social issues need to decide on principles to guide them as they face challenges related to regulatory compliance and customer trust, said Brad Smith, president of Microsoft Corp.
“You have to know what you stand for,” Mr. Smith said. “You have to be prepared as a business to some degree to connect the courage of your convictions with a hardheaded focus on business.” Microsoft’s principles of transparency and privacy have at times caused the company to take stances that are at odds with governments, he said.
Social and political issues are becoming more important for technology businesses, shaping perceptions of reputation and brand. “Large tech companies play a vital role in our modern economy and as such cannot avoid being entangled in important social issues, which often have no easy answer,” Jonathan Gruber, a Massachusetts Institute of Technology economist, said in a recent interview.
|
|
|
-
Firing employees suspected of dishonesty is standard practice at banks, where success depends on customers trusting a firm enough to leave their money there. But in the case of Wells Fargo & Co., regulators, lawmakers and even the bank’s own board have questioned whether junior staffers were really the ones to blame. Pressure from managers to meet aggressive sales goals was the root cause of the problem, according to a report from the board. That has been little consolation for low-level employees caught up in the scandal. Many have found they are now effectively blacklisted from the banking industry.
-
Gucci boosted its brand and sales by using social media to flaunt its connections with hip-hop artists and promote its theatrical fashion shows, but that momentum reversed in February, after the release of a sweater that critics likened to blackface. The result: Gucci lost the top spot among luxury companies for social-media engagement in March, according to Tribe Dynamics, and in July it reported its first quarterly drop in North American sales since early 2016. The retreat shows how luxury companies that thrive on Instagram and other social-media outlets can just as quickly stumble because of them.
|
|
|
|
We and its advisers are targeting a valuation that could slip below $20 billion. PHOTO: ADAM GLANZMAN/BLOOMBERG NEWS
|
|
|
-
WeWork’s parent company has chosen to list its shares on Nasdaq and outlined sweeping changes in its governance as the shared-workspace provider speeds up preparations for its hotly anticipated initial public offering in the face of tepid interest from investors. Meanwhile, SoftBank Group Corp. plans to buy at least $750 million of the shares in WeWork’s impending IPO, a move that could allow the office-sharing company to shore up an offering that has been plagued by tepid investor demand.
-
Plans by AT&T Inc. CEO Randall Stephenson to leave the helm to a longtime ally triggered the threat of a proxy fight by an aggressive Wall Street activist investor.
-
Walt Disney Co. ’s Chief Executive Robert Iger resigned from Apple Inc.’s board of directors, the tech giant said, severing a yearslong connection between the two companies as they prepare to launch competing video-streaming services.
|
|
|
|
Solera Holdings Inc. makes software used by auto dealers to manage various services. PHOTO: CJ GUNTHER/EUROPEAN PRESSPHOTO AGENCY
|
|
|
-
One of Vista Equity Partners’ largest buyout deals has spawned a legal fight over millions of dollars in stock awards that involves allegations of workplace misconduct and abuse. Vista was sued Wednesday by Kurt Lauk, a former director of automotive-services software maker Solera Holdings Inc., who said in the lawsuit he was removed from his position in May after he demanded an investigation into what he alleged was the private-equity firm’s “self-dealing.”
-
Factory workers at General Motors Co. went on a nationwide strike early Monday morning in the United Auto Workers’ largest work stoppage in more than a decade, putting it among the largest walkouts at a private-sector employer in years.
-
Unions in New York are pushing to change state law to extend employment protections for app-based workers. Most app-based workers—including drivers for Uber Technologies Inc. and Lyft Inc.—are currently considered independent contractors, and as such aren’t covered by New York’s wage and hour laws or by state systems of workers’ compensation and unemployment insurance. Labor groups say the growing number of app-based workers is fraying the social safety net and has led to low wages. They hope that the reclassification of workers as employees could be a prelude to later organizing drives.
-
The maritime industry is moving full steam ahead toward overhauling how ships get their power despite dissent from some vessel owners over the impact to their operations and concerns from shipping customers over how costs will be shared across supply chains.
|
|
|
|