On August 8th, 2022 the Ethereum smart-contract mixer Tornado Cash was sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) for its role in laundering more than $7 billion worth of cryptocurrency since its creation in 2019. Of this amount, over $455 million was stolen by the North Korean state-sponsored hacking organization Lazarus Group which the US sanctioned in 2019.
Following an audit conducted between 2019 and 2021, on August 2, 2022, the New York State Department of Financial Services (NYDFS) announced that Robinhood Crypto - a subsidiary company of Robinhood licensed to engage in virtual currency and money transmission business activities - will pay a $30 million penalty to New York State for significant failures in the areas of Bank Secrecy Act and Cybersecurity.
A CBDC is a new type of money that uses blockchain technology to create a unique digital identity and is issued and guaranteed by a central bank. Its value is linked to the national fiat currency, and as a digital innovation has the potential to be used by both households and companies to store value and make payments.
The global market landscape was thoroughly altered by the COVID-19 pandemic, which ushered in a state of distress across many industries. Amongst the several areas of impact, quarantine measures upended the way financial institutions—like banks and insurance companies—do business, forcing fintech institutions to embrace innovative business models to avoid being left behind or even having to shut down operations.
Regulatory authorities have applied a higher level of scrutiny over fintech companies in recent times, prompting those who operate in this innovative field to be more vigilant. As a result, a focus on compliance and regulations needs to be a core priority at the same level as product development, especially in the early stages.
