New Regulations Issued by MAS, the EBA, and FinCEN to Combat the Abuse of Crypto Assets and ERC Fraud

On November 23, the Monetary Authority of Singapore (MAS) finalized its proposed regulations for Digital Payment Token (DPT) service providers. In the press release, MAS emphasized the prohibition on retail customers using local credit cards to exchange for cryptocurrencies. To comply with these regulations, firms should implement new scenarios into their transaction monitoring solutions to detect the use of local credit cards and apply hard blocks to prevent transactions of this nature for segmented retail customers.

The European Banking Authority (EBA) has launched a public consultation on new guidelines to prevent the abuse of funds and crypto asset transfers for terrorist financing and other financial crimes. The guidelines aim to improve traceability and encourage common understanding among Payment Service Providers (PSPs), Intermediary PSPs (IPSPs), crypto-asset service providers (CASPs), and Intermediary CASPs (ICASPs). Firms wishing to partake in the consultation should submit their comments by February 26, 2024, and register for the virtual public hearing on January 17, 2024.

The Financial Crimes Enforcement Network (FinCEN) also issued a new alert on COVID-19 Employee Retention Credit (ERC) Fraud. The alert provides a comprehensive overview of ERC fraud and scam typologies and highlights select red flags to help compliance teams identify and report suspicious activity. When reporting potential incidences of this fraud type, firms should use the key term “FIN-2023-ERC” and select SAR field 34(z) (Fraud – other).

Until next week,

Andrew Davies

Global Head of Regulatory Affairs, ComplyAdvantage