Friday's Final Word | Week 24

Welcome to Fourthline's weekly newsletter, where we share insights, developments, and the latest news to help keep you sharp! Enjoy ???

???The?SEC's situationship with?Binance?and?Coinbase

???AML?rules- a?tax authorities?best friend

???Why a?single AI regulator?just won't work

???The ever-growing landscape of?crypto compliance

?? Challenges and opportunities in?digital identity

The SEC’s situationship with Binance and Coinbase keeps getting messier

In a wild week for the crypto industry, the U.S. Securities and Exchange Commission (SEC) sued major exchanges Binance and Coinbase for securities laws violations. The lawsuits alleged different violations for each exchange. Binance was accused of lying to regulators and faced charges related to misleading investors and manipulative trading. The SEC claimed that Binance's BNB and BUSD tokens, along with several other cryptocurrencies, were securities. Coinbase, on the other hand, was sued for operating as an unregistered securities exchange. Despite the chaos, the initial impact on the crypto market was relatively minimal, with Bitcoin and Ether experiencing minor declines.

Read full whitepaper?here

AI in banking: use cases and applications

This article explores the practical?applications of AI?in banking and examine how it is employed to drive efficiency, enhance security, and improve the overall banking experience for customers. The author delves into specific use cases demonstrating AI technology’s tangible benefits in banking.

Read full article?here

Anti-Money-Laundering Rules — A Tax Authority’s New Best Friend

The International Monetary Fund has released a working paper emphasizing the importance of leveraging AML measures to improve tax compliance and boost domestic revenue mobilization. The paper highlights the interrelation between tax crimes and money laundering, noting that both activities often occur in the same causal chain and involve similar techniques to evade authorities. Many tools used to combat money laundering can also be effective in fighting tax crimes. However, many tax authorities are not fully aware of this approach and fail to maximize its potential. The IMF's recommendations include the use of transparency measures, detection methods, enforcement provisions, and deterrence measures to strengthen tax compliance.

Read full article?here

Why a single AI regulator just won’t work

The recent Senate Judiciary subcommittee hearing on "Oversight of AI: Rules for Artificial Intelligence" discussed the need for regulation in the AI field. Christina Montgomery, IBM’s Chief Privacy and Trust Officer, argues against creating a stand-alone AI regulator and suggests a precision regulation approach instead. The existing regulatory agencies should be empowered to regulate specific AI use cases within their domains, leveraging their expertise and knowledge. Agencies need resources and AI expertise to understand the technology's impact on their work, including partnerships with businesses and academia. Additionally, the article proposes the establishment of an AI Center of Competence to provide expertise and consultation to agencies and maintain their understanding of AI's implications. Finally, it calls for a national privacy or stand-alone AI law to protect consumers' rights over their personal data and ensure transparent use of AI. The focus should be on making the best use of existing regulatory capacity and creating a future-proof regulatory framework.

Read full article?here

Fines and regulation: The ever-growing landscape of crypto compliance

How have the regulatory and legal frameworks governing cryptocurrency fines transformed over the years, and what are the key trends and challenges?

The regulatory landscape surrounding cryptocurrency fines has evolved significantly since 2018. Regulatory bodies, such as the SEC in the US and the FCA in the UK, have increased their enforcement efforts to protect investors and maintain market integrity. The focus has shifted towards individual accountability, leading to more enforcement actions and fines for fraudulent activities in the crypto space. High-profile cases involving celebrities and influencers have highlighted the importance of transparency and due diligence in promoting cryptocurrencies. The regulatory frameworks have expanded, with emphasis on AML/KYC compliance, signaling a more regulated and responsible crypto ecosystem. It is crucial for industry participants to stay informed and navigate the changing regulatory environment effectively to ensure compliance and avoid potential fines.

Read full article?here

Challenges and opportunities in digital identity

Fourthline?CEO Krik Gunning made an appearance on?Rabobank's?“Open Banking, Today and Tomorrow”?podcast.

In this episode they discuss the challenges and opportunities surrounding?digital identity in the financial landscape. As a sneak peak take a look at Krik’s final thoughts from the podcast:

“Financial institutions can get better at?storing the data?they get from customers and avoid having the same customer ask for the same information twice. This way we can make this process much?more user-friendly. We have seen many examples of fines?if you don't keep the data you have confidential. I would add that maybe we should have a fine if you?ask for the same information twice.”

Listen to podcast?here

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