On October 28, 2021, the Financial Action Task Force (FATF) released its Updated Guidance For A Risk Based Approach For Virtual Assets and Virtual Asset Providers (guidance or final guidance). The guidance hit on some of the hottest topics in crypto including DeFi, NFTs, unhosted wallets, stablecoins and the travel rule.  

Here are some takeaways:  

Check out TRM's full coverage of FATF's guidance here: https://www.trmlabs.com/post/fatf- provides-final-guidance  

Joining TRM Talks to discuss the guidance and get clarification on key issues are the chairs of FATF's Virtual Assets Contact Group (VACG), Habuchi Takahide of Japan's Financial Services Agency and Jon Fishman of the U.S. Treasury. 

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about how we're building a safer financial system for billions of people here: https://www.trmlabs.com/about

Todd Conklin, Counselor to the Deputy Secretary, joined a special edition of TRM Talks to announce and explain the action: "New industry-specific guidance outlines sanctions compliance best practices tailored to the unique risks posed in this dynamic space, while new data from [FinCEN] shows the increasing threat ransomware posed to the U.S financial sector, businesses, and the public during the first half of 2021."  

In the wake of last month's OFAC designation of non-compliant nested crypto exchange SUEX, the administration has taken a series of measures to coordinate across the federal government and with the private sector on the issue of ransomware. Last week, the U.S. Department of Justice announced the creation of a National Cryptocurrency Enforcement Team (NCET) comprised of prosecutors focused on combatting the use of crypto for illicit finance. This week the White House issued a fact sheet on ransomware which focused on disrupting ransomware actors and hardening cyber defenses. The fact sheet also addressed the importance of mitigating the risk of illicit activity by enforcing anti-money laundering compliance in the crypto space.  

Today's Treasury action, which includes the release of new Ransomware Trends in Bank Secrecy Act data from FinCEN, was the latest move. FinCEN’s analysis of ransomware-related SARs highlights average ransomware payment amounts, prevalent ransomware variants, and prominent ransomware money laundering typologies. 

See the analysis and access resource links here: https://www.trmlabs.com/post/watch-the-interview-treasury-comments-on-release-of-ransomware-related-data-and-guidance 

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

For crypto exchanges and other digital asset service providers, the nuts and bolts of a robust compliance program are many — from FinCEN to FATF, SARS to subpoenas, transaction monitoring to the travel rule. 

As legislators and regulators around the globe attempt to bring legal clarity to crypto, compliance teams are meanwhile tasked with understanding and applying current regulatory frameworks to their businesses, and more broadly, with managing financial crime risk as it takes new and different shapes in the cryptoverse.   

In this edition of TRM Talks, legal and compliance experts in the crypto space discuss the building blocks of a strong crypto compliance program, plus challenges and best practices to consider, including:  

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. 

Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

Treasury officials offer additional commentary on their first crypto exchange action and advisory in an exclusive interview with TRM Labs.  

U.S. Treasury's Office of Foreign Assets Control (OFAC) took its first-ever action against a cryptocurrency exchange, SUEX.io, a concierge cryptocurrency exchanger incorporated in Czechia but operating in Russia. This action comes as the United States attempts to tackle the scourge of ransomware attacks and harden cyber defenses against cybercriminals and rogue nation-state actors.   

In the view of Treasury, SUEX fills an essential niche in the ecosystem of under-regulated exchanges that, either through willful ignorance or witting cooperation, facilitate the conversion of illicit crypto ransoms into real-world currency.  

SUEX also operated as a so-called "nested" or "parasite" exchange, meaning SUEX did not directly custody of its clients' crypto. Instead, it fed off the infrastructure of a large, global cryptocurrency exchange to conduct its transactions. Nested exchanges often take advantage of the greater liquidity and lower transaction costs of big, multinational exchanges while presenting customers with a custom-made interface obscuring the connection to the larger service. Using this relationship with a large exchange, and access to cash from unknown sources, SUEX was able to convert the illicit monies of its clients to physical cash at an alarming scale. 

See TRM's deep-dive investigation on Suex here: https://www.trmlabs.com/post/behind-suex-io-the-first-sanctioned-cryptocurrency-exchange 

Todd Conklin, Counselor to the Deputy Secretary of the Treasury, highlighted the risk associated with nested exchanges when discussing the action with us this morning in a special edition of TRM Talks. 

Read more about the advisory here: https://www.trmlabs.com/post/ofac-takes-first-action-against-cryptocurrency-exchange-and-issues-updated-ransomware-advisory 

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

The U.S. Secretary of Homeland Security said recently, “As ransomware attacks continue to rise around the world, businesses and other organizations must prioritize their cybersecurity. Cybercriminals have targeted critical infrastructure, small businesses, hospitals, police departments, schools, and more." The White House has stressed the need to work with international partners and the private sector in order to defeat a borderless enemy and the F.B.I. Director has compared the threat to 9-11.

At the same time, we're seeing more and more instances of ransomware and cyberattacks that leverage cryptocurrencies to facilitate payments. How are law enforcement agencies and the private sector moving to coordinate defensive and offensive responses to this emerging threat? Join this discussion, featuring an impressive lineup of experts from a range of sectors, to find out.

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

The FBI was created in 1908 to address fast moving technological developments of the day. That same year Henry Ford's Model T began rolling off assembly lines making automobiles affordable to the masses and attractive to illicit actors who could drive cross country on violent crime sprees -- think Bonnie and Clyde. Indeed, it was cross-border technology that called for a national law enforcement entity with the tools and training necessary to meet a new breed of borderless criminal.  

While the technology has changed over the years, the Bureau's mission has stayed the same: "to identify, disrupt and dismantle existing and emerging criminal enterprises whose activities affect the United States." Today, George "Machine Gun" Kelly has been replaced by ransomware-as-a-service providers, darknet market administrators, cybercriminals, weapons proliferators and other modern threat actors. Many of these criminals have gone online in order to move funds at the speed of the internet, elude law enforcement, and obfuscate transactions.   

This month, a New York Times headline read, "Bitcoin and Encryption: A Race Between Criminals and the F.B.I.," and The Wall Street Journal sounded, "FBI Director Compares Ransomware Challenge to 9/11." As illicit actors and the FBI move to a digital battlefield, cryptocurrency, the internet of money, poses both unique risks and unique capabilities. TRM Talks to the FBI about how the Bureau is meeting these emerging threats and building cases in the age of crypto.  

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

For decades, policymakers across the globe have increasingly used economic sanctions to disrupt terror networks, limit the spread of weapons of mass destruction, punish human rights violations, deter election interference, and isolate rogue regimes. While the United States, the European Union and the United Nations deploy sanctions differently, all three focus on one common goal - cutting off illicit actors from the traditional financial system to prevent them from moving money and buying goods.

However, as we move from the fiat world of hawalas and shell companies to the digital world of programmatic money laundering in cryptocurrencies, what is the impact to economic sanctions? How do cryptocurrencies, with their promise of speed, pseudo-anonymity, and borderless reach, impact nation states' ability to enforce sanctions? How can cryptocurrency businesses and financial institutions build a sanctions compliance response to thwart sanctioned actors and conform with regulatory expectations?

TRM Talks Crypto and Sanctions with two people that have the answers - OFAC’s Head of Enforcement Lawrence Scheinert and Former Treasury Official and Sanctions expert Eric Lorber of K2 Integrity.

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

The state of Wyoming is known as the Wild West - a land of wide open spaces, the nation's most iconic national parks, and rodeo broncin' bucks. But Wyoming, over the last few years, has become known for something else - cryptocurrency. So how has Wyoming become the new frontier for financial innovation? It could be a forward leaning approach to chartering "crypto banks," favorable legislation that provides legal clarity around cryptocurrency, or the safe and sound banking environment for crypto-businesses?   

It is likely all of the above plus a savvy group of regulators, state senators and industry leaders coming together to make the Cowboy State the Crypto State. TRM Talks is joined by that group -  Albert Forkner, Wyoming State Banking Commissioner, Wyoming State Senator Chris Rothfuss, Co-Chair of the Wyoming Select Committee on Blockchain, Financial Technology and Digital Innovation and David Kinitsky, President and CEO of Kraken Financial.  

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

On January 6, 2021, the storming of the United States Capitol by a mix of rioters, hooligans, and militants, bent on upending the Democratic process, shined a spotlight on the already growing threat of Domestic Extremism. Domestic Extremism, motivated by an array of grievances, ideologies, and white supremacy is what the U.S. Department of Homeland Security called, in 2020, “the most persistent and lethal threat in the Homeland.”

Who is the radical right? How do they use social media? How are they financed and why is Bitcoin, according to white supremacist Richard Spencer, “the currency of the alt-right?” Watch this TRM Talk as we explore the threat of Domestic Extremism with Former Acting Assistant Attorney General for National Security Mary McCord and Professor Megan Squire, a Senior Fellow at Southern Poverty Law Center and one of the foremost experts on the radical right.

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about

The Internal Revenue Service's (IRS), for years, has been the tip of the spear for financial fraud investigations.  

But in 2020, the IRS doubled down creating the Fraud Enforcement Office (OFE) focused on rooting out tax evasion, abusive tax avoidance scams and other malicious activity including the use of cryptocurrency to facilitate fraudulent activity. The OFE, part of IRS's Small Business/Self Employed Division, is leading the charge in holding fraudsters, tax cheats, scammers, and money launderers accountable. 

In this episode, TRM Talks to Eric Hylton, IRS Commissioner of the Small Business/Self Employed Division and Carolyn Schenck, IRS Fraud Counsel, on how they are leveraging financial expertise across the IRS and around the world to combat cryptocurrency-related fraud.  

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. 

Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about