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| Compliance Officer at Cryptocurrency Firm |
If you looked closely, all the major executives at FTX, save one, fled the Bahamas headquarters when the sh-t hit the fan, and the company became instantly insolvent. It was, we now know, a house of cards, a virtual Potemkin village. What if you were the Director of Compliance at that company, dealing with regulatory matters? I don't know about you, but if it was yours truly, I would be at the U.S. Attorney's Office in D.C., with competent counsel, seeking immunity from prosecution, because I would anticipate being accused, sooner or later, of Willful Blindness. You can't say you didn't know something was amiss. Do you really want to be indicted?
The very nature of the cryptocurrency industry renders it a nightmare for compliance. Its very structure poses unsurmountable challenges on several fronts, leading me to ask, which compliance officers are brave (or foolhardy) enough to risk potential Federal Prison time to serve a client. I do not make that allegation lightly; the opaque nature of crypto, as demonstrated by secrets within secrets at FTX, even to the point where they were not known to insiders operating the company, dictates that creating an effective compliance program, at the banking best practices level, might be an impossibility.
Until and unless there are effective means of auditing, controlling and gatekeeping the cryptocurrency industry, I must at this time recommend to my fellow compliance officers that they avoid what I deem to be an extraordinary level of personal risk, should they take on the compliance functions for any crypto company. Federal Prison, even for those with a thick skin, is not fun; I've been there, and even with the Vietnam War in my resume, I found it painful.
The very nature of the cryptocurrency industry renders it a nightmare for compliance. Its very structure poses unsurmountable challenges on several fronts, leading me to ask, which compliance officers are brave (or foolhardy) enough to risk potential Federal Prison time to serve a client. I do not make that allegation lightly; the opaque nature of crypto, as demonstrated by secrets within secrets at FTX, even to the point where they were not known to insiders operating the company, dictates that creating an effective compliance program, at the banking best practices level, might be an impossibility.
Until and unless there are effective means of auditing, controlling and gatekeeping the cryptocurrency industry, I must at this time recommend to my fellow compliance officers that they avoid what I deem to be an extraordinary level of personal risk, should they take on the compliance functions for any crypto company. Federal Prison, even for those with a thick skin, is not fun; I've been there, and even with the Vietnam War in my resume, I found it painful.
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