Good morning. Chief compliance officers from three top cryptocurrency exchanges said they continue to make additional investments in compliance controls and staffing as they look to move on from settlements with U.S. regulators over various compliance failures.

Compliance chiefs at crypto exchanges Binance, Coinbase and Kraken said at an industry conference Wednesday that they also hope lessons from these settlement agreements could help improve compliance programs within the wider industry.

• The background: The three exchanges, which together process tens of billions of dollars in daily trading volume, according to crypto price-tracking website CoinMarketCap, all reached settlements with U.S. regulators over the past two years.
   
• The implications: “In a sense, our settlement, with a massive fine and the requirements coming from that, probably is a model for others in the industry and will be an opportunity for us to continue to uplift the [compliance] program,” Noah Perlman, Binance’s chief compliance officer, said during a panel at blockchain analytics provider Chainalysis’s annual Links conference in New York.
   
• Priorities for Coinbase and Kraken: Forecasting compliance needs that could come with increasing transaction volume and building up capabilities to address them are some of the top priorities for them. A part of Kraken’s 2024 planning is modeling its transaction volume and its compliance response to such scale, including figuring out what kind of reporting is needed, according to Kraken Chief Compliance Officer CJ Rinaldi.

KPMG fined record $25 million in exam-cheating scandal. 

KPMG’s Netherlands unit agreed to pay a $25 million fine over claims of exam cheating and misinforming investigators, the largest monetary penalty imposed on an auditing firm by the Public Company Accounting Oversight Board.

KPMG Accountants NV failed to take adequate steps to identify and investigate misconduct in which employees provided answers or access to questions on exams, in violation of the PCAOB’s quality-control rules, the U.S. audit regulator said Wednesday. The tests for the firm’s mandatory training courses, which cover topics such as U.S. audit standards, professional ethics and independence, are aimed at helping auditors maintain their professional certifications to perform certain types of audits.

U.S. prosecutor welcomes new anti-bribery powers.

U.S. prosecutors intend to bolster their investigations into corrupt foreign officials using a new antibribery law, a Justice Department official said Wednesday.

The Foreign Extortion Prevention Act, which was passed as part of a defense spending bill in December, makes it illegal for a foreign official to seek or accept a bribe from U.S. companies or persons. It augments the Foreign Corrupt Practices Act, which since 1977 has prohibited companies from paying bribes to foreign officials.

The FEPA varies in some key ways from the FCPA, including in its definition of a foreign official, panelists at a Practising Law Institute panel said Wednesday. They added that the Justice Department has long used money-laundering statutes and other laws to prosecute foreign officials who receive bribes from companies.

“It’s not as though we have not tried to—and in several cases have—successfully prosecuted foreign officials who were the recipients of bribes,” said David Fuhr, the head of the DOJ’s FCPA unit.

“I do think it is in keeping with our focus on the larger point of our work, which is to address corruption in general,” Fuhr added. “It’s a U.S. criminal statute just like the FCPA [and] we’re going to try and enforce that as best as we can.”

—Dylan Tokar

• Uniswap Labs, creator of the world's largest decentralized crypto exchange, said that it received a so-called Wells notice from the Securities and Exchange Commission on Wednesday, indicating that it faces a potential SEC lawsuit.
   
• Russian businessman Mikhail Fridman won a legal challenge over the European Union’s decision to sanction him—the highest profile defeat so far for the bloc’s sanctions regime against Russia in response to its war in Ukraine.
   
• Switzerland said UBS will have to substantially raise its capital levels to comply with new rules aimed at preventing a repeat of Credit Suisse’s near-collapse last year.
   
• Philips said it reached a final agreement with the U.S. Justice Department and Food and Drug Administration on terms of a settlement related its Respironics ventilators, and backed its medium-term guidance.
   
• Allen Weisselberg, the former finance chief of Donald Trump’s family business, was sentenced Wednesday to five months in jail for lying during a civil-fraud investigation into the former president.
   
• Before his weekend showdown with tech billionaire Elon Musk, Brazil’s Supreme Court judge Alexandre de Moraes had already earned a reputation as a lightning rod in Brazil’s battles over free speech.

WTO sees signs of trade revival, but risks from fragmentation. 

World trade is set to rebound this year and next as cooling inflation eases pressure on household budgets, according to the World Trade Organization, but the recovery may be weakened by growing distrust and fresh barriers between some large economies.

Flows of goods and services across national borders have swung wildly over recent years in response to the Covid-19 pandemic and the subsequent lifting of related restrictions. While trade in goods soared in 2021 and 2022 as households in lockdown were deprived of access to many services, last year saw a decline of 1.2%.

Elon Musk and Jamie Dimon’s AI predictions and what they mean for the future of humanity. 

Elon Musk and Jamie Dimon say artificial intelligence will be smarter than humans and transform society.

The question now is whether the prognostications of one of the world’s richest people and the head of the nation’s largest bank will come to fruition, or turn out to be overstated.

• As Palestinians trickle back to Khan Younis, they find destruction. 
   
• President Biden huddled with Japanese Prime Minister Fumio Kishida as the two leaders sought to strengthen their security ties in the Pacific as a counterweight to China.

• Remember the previous “China shock” when “comparative advantage” was all the rage? This time, it is all about industrial policy. The question is whether Europe’s industrial powerhouse, Germany, is in with the new trend.
   
• Billionaire businessman Don Hankey made headlines in early April when his company, Knight Specialty Insurance, provided the $175 million bond that Donald Trump posted in his New York civil fraud case. It isn’t the first time Hankey has financially backed a troubled real-estate developer.
   
• The killing of three private-security contractors in last week’s Israeli strike on an aid convoy in Gaza shined light on an industry that in recent years has shifted from working for military forces to helping protect humanitarian organizations that operate in conflict zones.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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