Current Emerging Issues
Key Regulator Call for Heightened Crypto Supervision –
The Commodity Futures Trading Commission (CFTC) should invoke heightened supervision of the crypto exchanges, CFTC Commissioner Christy Goldsmith Romero said.
Speaking in Singapore, Goldsmith Romero said that for months she has internally called on the CFTC to invoke heightened supervision, which would include frequent examinations and a greater focus on cybersecurity, conflicts of interest, and safety and soundness. She also called for:
- Congressional action to ban commingling of customer and company funds at crypto exchanges.
- Separate categories of retail crypto customers that distinguish household and professional investors.
- The formation of an “Office of Retail Investor Advocate”.
BlockFi Bankruptcy:
The latest among many disruptions in the sector is the recent bankruptcy filing by the crypto lender “BlockFi”, which stemmed from FTX’s collapse in November. BlockFi said its larges creditors include FTX, which provided the lender a $400 million line of credit in June which followed the collapse of “TerraUSD Stablecoin”.
Following the collapse of FTX, policymakers need to ensure new policies directed at the crypto sector fully to reflect its risk.
ICBA President and CEO said, “the ongoing crypto failures validate what community banks have long warned – the crypto sector is fragile, prone to facilitating financial crime, entirely lacking in the protection available in the banking systems, and ultimately a poor alternative to banking locally.”
Committee Activity:
The Senate Agriculture Committee will meet at the end of November for a hearing on the FTX collapse and the congressional response. The House Financial Services Committee has said it will host its fires FTX hearing on December 13th, and the Senate Banking Committee has said it also intends to hold hearings.
Understanding FDIC Insurance Coverage
What does FDIC Insurance Cover?
Checking Accounts
Negotiable Order of Withdrawal (NOW) Accounts
Savings Accounts
Money Market Deposit Accounts (MMDA)
Certificates of Deposit (CD)
Cashier’s Checks
Money Orders
Other Official Items Issued by the Bank
Not Covered by FDIC Insurance?
Stock Investments
Bond Investments
Mutual Funds
Life Insurance Policies
Annuities
Municipal Securities
Safe Deposit Boxes or their Contents
U.S. Treasury Bills, Bonds, or Notes
Bitcoin or Other Cryptocurrency Exchanges
Compliance Questions and Answers
BSA Question:
The Commodity Futures Trading Commission (CFTC) should invoke heightened supervision of the crypto exchanges, CFTC Commissioner Christy Goldsmith Romero said.
A customer brings in $10,000 in cash on behalf of a business and $3,000 in case for a personal loan payment. The customer deposited it into a personal account on the same business day. Would you be required to file a Currency Transaction Report (CTR) on this customer?
Answer:
Yes, a CTR must be filed since you have over $10,000 in currency brought in by or on behalf of any person during any business day.
EFTA Question:
An existing deposit customer who has had an account with an institution for over a year. Now, the customer is requesting to have overdraft protection added to their account. If the customer comes in and signs a form to have the overdraft protection added to their account, do we need to give the customer a new Regulation E disclosure?
Answer:
A full Regulation E initial disclosure is NOT required unless there have been any changes that have not already been disclosed to the customer. However, the bank needs to comply with the “opt-in” requirements noted in the regulation. “Provide a separate written notice that describes the bank’s overdraft service, give the customer a reasonable time or opportunity to opt-in to the overdraft service for ATM and one-time debit card transactions, obtain the customers affirmative consent to the bank’s payment of ATM and one-time debit card transactions, and provide the customer with written confirmation of their opt-in (including a statement of their right to revote that consent).”
