Digital Currency

Need a Chief Compliance Officer? Introducing Acuity’s Digital Asset Compliance Services

By December 5, 2018 No Comments

chief compliance directorToday’s digital asset regulatory landscape is still anything but clear for US-based companies.

The Securities and Exchange Commission (the “SEC”), the Commodity Futures Trading Commission (the “CFTC”), and the US Department of Treasury (“FinCEN”) have all made statements about aspects of digital assets that they believe fall under their respective jurisdictions. The SEC says it’s a “security”, the CFTC is saying it’s a “commodity”, FinCEN thinks its “currency”, and on top of all of that the IRS views it as “property”!

It may take an act of Congress to sort all of this out (literally!), in the meantime companies in the digital asset space may want to consider adopting compliance best practices from the securities and commodities industries to reduce regulatory risk.

One of the areas that regulators are especially sensitive to in financial markets is what is known as ‘insider trading’. This word often brings a negative connotation that most people associate with one of several Wall Street movies wherein a character finds out non-public information and then places trades in public markets to profit illegally from them.

Both the SEC and the CFTC view insider trading as a crime and although the verdict is still out in terms of which regulator will have the final say in crypto, it would make sense for digital asset companies to stay ahead of the curve with regards to best practices around employee trading of tokens on material non-public information (“MNPI”).

This means developing an employee trading policy, monitoring it, and having the proper protocols and controls in place to deal with violations and any whistleblower events.

As such, Acuity is now excited to offer an outsourced compliance service to help facilitate these activities at a fraction of the cost of hiring a full time compliance officer.

This new Digital Asset Compliance Service includes the following:

Setup:

  • Initial consultation and development of a formal employee trading policy contract for each employee to execute.
  • Employee wallet onboarding for monitoring (we use Legible.io).
  • Setup of Whistleblower hotline system.

Ongoing:

  • Monitoring trading for all covered persons and reporting all activity to management.
  • Communicating any whistleblower incidents or other policy violations to management.

Annual:

  • Reviewing the documents for any update needs.
  • Verifying all employees are signed up.
  • Providing insight into new regulatory developments.

If you’re interested in learning more about our Digital Asset Compliance Services or our Cryptocurrency Accounting services, get in touch today. You can also keep up with related news, events, and resources by subscribing to our quarterly crypto newsletter.