Insight

Washington Report 360 | April 8, 2022

Sanctions related to crypto and other crypto activities

Amy S. Matsuo

Amy S. Matsuo

Regulatory and ESG Insights Leader, KPMG US

+1 919-664-7100

Key Highlights

Sanctions risks. The Administration and Treasury’s OFAC imposed prohibitions on new investments in the Russia Federation, and expanded sanctions on Russia’s largest public and private banks and other entities and individuals; OFAC also sanctioned a “darknet market” and a virtual currency exchange to reinforce efforts to disrupt potential sanctions evasion through virtual currencies (i.e., crypto assets). 

Crypto and digital assets. OFAC clarified that sanctions apply to transactions in virtual currency and cautioned that certain exchanges may permit “illicit transactions;” FDIC directed supervised entities to notify the agency of current or planned crypto-related activities; SEC outlined customer/investor protection considerations in the crypto markets; Treasury reiterated that regulations for crypto and digital assets should follow their risk and activities (versus specific technologies); OCC outlined three policy questions related to the architecture of a U.S. stablecoin system.

Financial services regulatory and policy news

Banking

  • OCC:
    • Issued Interest Rate Risk Statistics Report
    • Published Community Development Investments, highlighting ways banks can collaborate with CDFIs and other community-based organizations to help rebuild communities 
    • Published revised licensing booklets to the Comptroller Handbook, covering “General Policies and Procedures,” “Management Interlocks,” and “Public Notice and Comments”
    • Provided remarks on the architecture of a U.S. stablecoin system
  • FDIC:
    • Released a letter requiring FDIC-supervised institutions to notify the agency of their current or planned crypto-related activities
    • Highlighted three teams in the Digital Identity Tech Sprint
  • CFPB:
    • Issued a proposed rule amending implementing regulations to the FCRA to prohibit consumer reporting agencies from including adverse information on victims of human trafficking
    • Released the FFIEC 2022 edition of “Guide to HMDA Reporting: Getting It Right!”
    • Published a blog on “Helping borrowers hold mortgage servicers accountable”
    • Published a Snapshot Report on consumer use of state payday loan extended payment plans

Capital Markets

  • SEC:
    • Proposed rules for the registration and regulation of security-based swap execution facilities
    • Provided remarks on SEC’s work in the crypto markets, including platforms, stablecoins, and tokens
    • Provided remarks at the 2022 41st Annual Small Business Forum pertaining to small business’ access to capital markets

Other

  • Administration:
    • Issued a Fact Sheet on additional sanctions and prohibitions on Russia
    • Signed an Executive Order prohibiting new investment in and certain services to the Russian Federation
    • Extended the pause on student debt repayments until August 31,2022
  • Treasury:
    • Provided remarks on digital assets policy, innovation, and regulation
    • OFAC:
      • Sanctioned a Russia-based “darknet market” and a virtual currency exchange; related DOJ statement
      • Sanctioned Russia’s largest public and private banks
      • Issued updates to its Special Designated Nationals list
      • Issued Non-proliferation Designations
  • FHFA:
    • Announced suspension of foreclosure processes for borrowers applying for assistance under the Department of the Treasury’s Homeowner Assistance Fund
  • FSB:
    • Published a statement welcoming the transition away from LIBOR
  • BIS:
    • Published a paper on Supervisory practices for assessing the sustainability of banks Insurance

Industry news headlines

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