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CFTC, FinCEN, and SEC Issue Joint Statement on Activities Involving Digital Assets

On October 11, the leaders of the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchange Commission (collectively, the Agencies) issued a joint statement reminding persons engaged in activities involving digital assets of their anti-money laundering (AML) and countering the financing of terrorism (CFT) obligations under the Bank Secrecy Act of 1970 (BSA).

In substance, the joint statement reminds various market participants — such as futures commission merchants, introducing brokers, money service businesses and broker-dealers — that AML/CFT obligations apply to entities that the BSA defines as “financial institutions.” AML/CFT obligations include the implementation of an effective AML program, recordkeeping and reporting. These requirements apply to all activities in which the registrants are engaged and are not limited in their application to activities that are subject to regulation under the Commodity Exchange Act or the securities laws, as applicable.

Additionally, the leaders of the respective Agencies each added comments above and beyond the joint statement that reinforced the respective mission of the Agencies and commitment to upholding the regulations discussed in the joint statement.

The full joint statement is available here.

©2019 Katten Muchin Rosenman LLP

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About this Author

Susan Light, Katten Law Firm, Finance Law Attorney, New York
Partner

Susan Light focuses her practice on financial services regulatory matters. She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), other self-regulatory organizations (SROs) and state and federal regulatory authorities. She has particular experience related to sales practice issues, financial and operational issues, anti-money laundering, crowdfunding, cybersecurity, and cryptocurrencies.

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212-940-8599
Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.

Kevin has served as counsel to the Futures Industry Association (FIA) for more than 20 years. In 2012 he was recognized for his exemplary efforts on behalf of the association and the industry, in particular for his guidance in navigating the challenges confronting FIA member firms in complying with the Dodd-Frank Wall Street Reform and Consumer Protection Act.

312-902-5372
Michael T. Foley, Katten, Lawyer, Finance, FINRA, Chicago
Special Counsel

Michael Foley represents broker-dealers, investment advisers and other financial services industry participants with respect to a broad spectrum of legal and regulatory matters arising under the federal securities laws.

Michael has nearly 20 years of experience in private practice and in-house at both a large, full-service broker-dealer and at an online discount broker-dealer, advising broker-dealers and other financial institutions regarding compliance with the federal securities and commodities laws, and with the regulations of the US Securities and Exchange...

312-902-5452
Associate

Leonard Licht is an associate in the Financial Services practice. He advises a broad range of financial market participants, including investment managers to private funds and investors in private funds. Prior to joining Katten, Lenny practiced as a corporate and securities attorney and has also worked in an analytical capacity with a family office.

While in law school, Lenny was a Heyman scholar and member of the Moot Court Honor Society.

212-940-6587
Associate

Adam Haft is an associate in the Financial Services practice.

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212.940.6489