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- Bank Of England Consults On Wholesale Cash Distribution
- Non-Banks Should Put Out Wrongdoings, CFPB Says
- Visa To Invest $1bn in Africa
- Singapore Banker Barred For 15 Years Following Criminal Conviction
- Bankman-Fried Arrested And Charged In the US
- Crypto, Consumer Protection On Top Of US Senate Agenda
- Pro-Crypto MEP Arrested In Corruption Probe
- US Senators Demand Fed Accountability
- US Senate Passes Whistleblower Bill
- US Fed Launches RFP Working Group
- SEC Wants Banks To Disclose Crypto Exposure
Bank Of England Consults On Wholesale Cash Distribution
The Bank of England has unveiled its plans to ensure retail access to cash for businesses and individuals.
This has been enabled through new powers granted in the Financial Services and Markets Bill, which is currently making its way through parliament.
The new statutory Wholesale Cash Distribution (WCD) regime will have two core parts: market oversight and prudential supervision. The main objective of the market oversight regime is to manage risks to the effectiveness, resilience and sustainability of WCD in the UK.
Meanwhile, the main objective of the prudential supervision regime is to manage risks that threaten the stability of, or confidence in, the UK financial system, and/or have serious consequences for business or other interests throughout the UK, or any part of the UK.
Respondents have until February 10, 2023 to respond to the consultation.
Non-Banks Should Put Out Wrongdoings, CFPB Says
The US Consumer Financial Protection Bureau (CFPB) proposes an online registry that shows when certain nonbank financial firms become subject to agency or court orders related to certain local, state, or federal consumer financial protection rules.
The CFPB also proposes to publish the orders and company information via the registry and that larger companies supervised by the CFPB designate an individual to attest whether the firm is adhering to the registered law enforcement orders.
The registry will “help unify the efforts of consumer financial protection enforcers, as well as provide the increased transparency and coordination that are critical to ensuring accountability and fairness in the marketplace,” the agency says.
The announcement noted that the CFPB might later consider collecting similar information from banks and credit unions. However, at present, there is “greater need to collect this information from nonbanks”, the release said.
Visa To Invest $1bn in Africa
The card giant has pledged to invest $1bn in Africa by 2027 to scale operations, deploy new technologies and deepen collaboration with partners.
The company said the investments will be used to strengthen the payment ecosystem through new innovations and technologies, support the digitisation of economies, and invest in upskilling, talent development and capacity building.
Visa chairman and CEO Al Kelly said the company has been investing in Africa for several decades to grow “a truly local business” and the continent is central to Visa’s long-term growth plans.
Visa says the investments will also help increase financial inclusion. There are an estimated 500m people in Africa without access to formal financial services and less than 50 percent of the adult population use digital payments.
Singapore Banker Barred For 15 Years Following Criminal Conviction
The Monetary Authority of Singapore (MAS) has issued a 15-year prohibition order to Han Delong, a local banker who was convicted of breach of trust, cheating, forgery and conversion of the proceeds of crime.
Delong will be prohibited from providing any financial advisory service, or from acting as a manager, director or substantial shareholder of any financial advisory firm.
At the time of the offences, which took place between 2015 and 2018, Delong worked for United Overseas Bank Ltd (UOB) and Oversea-Chinese Banking Corporation Limited (OCBC).
He was convicted of deceiving seven customers into transferring almost S$2m ($1.5m) to his personal bank accounts by promoting “fictitious” fixed deposits and other investment products.
He then forged bank documents to give the impression that the transactions were genuine.
Bankman-Fried Arrested And Charged In the US
Sam Bankman-Fried, the crypto billionaire and former chief executive of FTX, has been charged by the US Securities and Exchange Commission (SEC) with defrauding investors.
According to the SEC’s complaint, since at least May 2019, FTX, which is based in the Bahamas, raised more than $1.8bn from equity investors, including approximately $1.1bn from approximately 90 US-based investors.
In his representations to investors, Bankman-Fried promoted FTX as a safe, responsible crypto-asset trading platform, but in reality the SEC accuses him of: orchestrating a years-long fraud to conceal from FTX’s investors the undisclosed diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund; the undisclosed special treatment afforded to Alameda on the FTX platform, including providing Alameda with a virtually unlimited “line of credit” funded by the platform’s customers and exempting Alameda from certain key FTX risk mitigation measures; and undisclosed risk stemming from FTX’s exposure to Alameda’s significant holdings of overvalued, illiquid assets such as FTX-affiliated tokens.
"FTX’s collapse highlights the very real risks that unregistered crypto-asset trading platforms can pose for investors and customers alike,” said Gurbir S. Grewal, SEC’s enforcement director.
“While we continue to investigate FTX and other entities and individuals for potential violations of the federal securities laws, as alleged in our complaint, today we are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers."
Crypto, Consumer Protection On Top Of US Senate Agenda
In its Year-End Recap and Next-Year Outlook, the Senate Banking Committee has released its new year priorities, which include plans to design a comprehensive regulatory framework for cryptocurrencies.
Committee chair Sherrod Brown (D-OH) said he is committed to working with members of Congress to come up with legislation "that protects our national security and puts consumers — not the crypto industry — first."
Brown also put consumer protection high on his agenda, including "defending the CFPB [Consumer Financial Protection Bureau]", which has faced fierce criticism under the leadership of Rohit Chopra.
Additionally, Brown intends to push forward his Close the Shadow Banking Loophole Act and fix public trust in the Federal Reserve.
"In the 118th Congress, we will build on our work to ensure our economy serves all Americans — not just those at the top — by increasing the supply of affordable homes, protecting our consumers and financial system from risks like cryptocurrencies and climate change, rebuilding trust in our institutions, and helping Americans keep more of their hard-earned money at a time when they need it most,” Brown commented.
However, pushing through these priorities will probably require more compromise from lawmakers as the next Congress will kick off with a Democrat-controlled Senate and Republican-controlled House.
Pro-Crypto MEP Arrested In Corruption Probe
Eva Kaili, a centre left parliamentarian, is one of four people to be arrested by the Belgian police in relation to a corruption scandal.
The allegations revolve around cash payments by Qatar to win influence with EU officials. The four have been charged with corruption and money laundering.
Kaili was known for being a crypto and payments advocate. She had previously called for the establishment of a pan-EU payments system, and pushed for softer anti-money laundering rules for crypto transactions earlier this year.
“Transfer of funds from unhosted wallets to EU CASPS [crypto asset service providers] should be possible in a proportionate way. Otherwise EU risks circumvention of EU infrastructure via non-EU providers. To fight crime and corruption while remaining tech neutral & innovation friendly,” she tweeted in March.
US Senators Demand Fed Accountability
US senators Elizabeth Warren (D-MA) and Pat Toomey (R-PA) have introduced legislation to strengthen Federal Reserve accountability and ensure that no financial regulator can withhold “critical ethics-related information” from Congress.
The bipartisan Financial Regulators Transparency Act came in response to a number of controversial actions within the Fed that lawmakers were unable to untangle because the regulator would not submit the relevant information to the lawmakers.
Warren has been seeking information from the Fed since last October relating to what she calls the “culture of corruption”. During the pandemic, several high-ranking Fed officials made multimillion-dollar stock trades, alledgedly making use of their knowledge of future Fed actions.
In February, Toomey uncovered that Sarah Bloom Raskin, a former Fed governor, may have influenced the Kansas Fed to grant a fintech firm a master account. As a result of her lobbying, the fintech, where Raskin served as a board member, became the first fintech to access the Fed payment infrastructure.
“During the largest ethics scandal in the history of the Federal Reserve system, Fed officials have stonewalled the American people and slow-walked their representatives in Congress," said Warren.
"This bipartisan bill is a necessary response to ensure that no financial regulators can ignore congressional oversight into ethics failures, and finally deliver more transparency and accountability for any wrongdoing,” the senator stressed.
US Senate Passes Whistleblower Bill
The US Senate has unanimously approved a bill that seeks to strengthen the country’s anti-money laundering (AML) whistleblower programme.
Under the proposal, the AML whistleblower programme would be expanded by adding support for whistleblowers who report violations of US sanction laws, providing a funding mechanism to pay whistleblower awards and guaranteeing that whistleblowers will be paid a minimum award amount.
These changes follow best practices from other programmes and puts the AML programme on par with them.
A companion bill introduced in the House has also received approval from the Financial Services Committee, which means it can be placed on the legislative agenda.
The legislation was introduced by Senate Judiciary Committee ranking member Chuck Grassley (R-IA) last June, while the companion bill was filed by Alma Adams (D-NC) in March.
US Fed Launches RFP Working Group
In preparation for the mid-2023 FedNow launch, the Federal Reserve has formed an industry working group to establish voluntary principles for a consistent end-customer experience for the FedNow’s Request For Payment (RFP) functionality.
The group will also work to consider practices that encourage broad adoption of the RFP functionality.
Group meetings will take place each month starting now until the second half of next year and will involve nearly 100 FedNow community members, including Apple, Google, Cash App and American Express, as well as Netflix and Walmart.
According to the Fed, RFP will be one of the key features of FedNow.
SEC Wants Banks To Disclose Crypto Exposure
The US Securities and Exchange Commission (SEC) has asked companies to consider their exposure to crypto-market turbulence when they make their disclosures to investors.
“Companies may have disclosure obligations under the federal securities laws related to the direct or indirect impact that [the recent crypto market turmoil] and collateral events have had or may have on their business,” the securities regulator said.
The SEC will now give companies an exhaustive list of the issues that they should consider, including how the bankruptcies of crypto partners and the downstream effects of those bankruptcies have affected or may affect their business.
The guidance comes one month after the abrupt collapse of FTX, the full impact of which is still yet to be seen.
