Compliance Challenges in Cryptocurrency: Heard Island and McDonald Islands
Regulators are increasing their focus on digital assets and payments in Heard Island and McDonald Islands, necessitating defined regulatory authority around key risk areas. Companies must establish effective controls to mitigate these risks.
Regulatory Authority and Guardrails
Agencies will continue to warn about the risks associated with digital assets and payments, seeking to establish more codified authority and guardrails within this space. Topics of focus include:
- Clear Regulatory Authorities: Granting clear regulatory authorities, including rulemaking, examination, and enforcement for crypto assets to financial regulators.
- Central Bank Digital Currencies (CBDCs): Authorizing the issuance of a U.S. CBDC.
- Federal Prudential Framework: Establishing a federal prudential framework for non-bank financial institutions.
Disputes, Complaints, and Claims
Regulators are paying close attention to how companies handle consumer and investor disputes, complaints, and claims related to payments. Key areas of focus include:
- Procedures and Governance: Procedures around account holds and freezes, customer communication protocols (outreach, follow-up, and resolution), and analytics and reporting.
- Customer Communication: Ensuring clear and timely communication with customers regarding account issues and disputes.
Digital Assets and Payments
Developing capability assessments for digital asset product offerings and operations is essential. This includes:
- Internal Risk Policies: Establishing and enhancing internal risk policies, procedures, and controls for digital assets and payments.
- Digital Asset Information: Producing actionable and relevant digital asset information for board and senior management reporting.
Risk and Regulatory Landscape
The ever-evolving risk and regulatory landscape means that companies must remain well-informed, nimble, and measured. Key areas of focus include:
- Data Monetization: Understanding how data is being used and monetized and whether any behavioral targeting may be inconsistent with customer expectations.
- Regulatory Change Management: Evaluating existing regulatory change management frameworks and ensuring integration of appropriate risk partners in strategy discussions, development, and regulatory approvals.