Welcome to FinTech TV.
I'm Remy Blair.
We're coming to you from Money 2020 USA Las Vegas, Nevada, and right now I am joined by Lea Shepherd from Eliptic.
Leah, great to have you here.
Thank you so much for joining me.
Good morning, Remy.
Nice to join you.
Thank you.
Well, we're here in Vegas as Money 2020 gets underway, but first and foremost, I do want to ask you about this year's typologies report.
What's different and why?
Philliptic issues a typologies reports every single year to ensure that banks, financial institutions, and regulators can follow how it is that criminals are innovating on their criminal enterprises.
We know that criminals' main aim is to chase liquidity.
They want to cash out on their exploits, cash out on their hacks, and what this year's typologies report does is follow these new innovations and techniques and really identify what those criminals are.
Doing how are they creating these hybrid typologies that not only use digital assets but also use a traditional financial system to innovate in the ways that they launder, move, create scams, frauds, and so on.
One of the biggest highlights focuses on pig butchering, which is a romance scam, and looks at the idea of industrializing that.
It's become a professionalized service.
It's really at a global scale.
Yeah, and Leah, you did highlight some of the concerns, and we're here at a FinTech conference, so obviously we're learning about the intersection of traditional finance with DFI as well.
So what do viewers need to know out there whether we're talking about institutional investors, retail investors, or people who are watching and want a better grasp of what they need to know?
100%.
So this. section between traditional finance, fintech, stablecoins, digital assets is happening live and it's here to stay.
One of our key messages is that these risks can be managed, whether it's DI, whether it's managing stablecoins out in the wild.
The idea of an open ledger, this is exactly the power of blockchains, that visibility, that traceability, seeing where money has been and where money is going.
That's a paradigm shift for.
Finance who are almost used to one swift message away.
This is a whole other area that allows us to do compliance differently.
We're innovating on the ways that we're doing sanctions management, innovating on the way that we're managing scams and finance overall, and the conversations here at Money 2020 between founders and innovators really ensures that we're having that robust conversation at the seams of Trad fire and digital assets, and it's super exciting.
Yeah, and I do want to ask you, are current analytics enough to keep up with what's unfolding?
So the current on-chain analytics offer robust risk management practices that really are a bit of a learning curve to to tradify.
I would say it's enough from an on-chain perspective.
However, if you're a financial institution that's looking to get into stablecoins, that's looking to get into digital assets, your tech stack needs to really marry your own risk appetite, your own risk assessment as it is with your US dollar, and then innovate that into digital assets and crypto and make those adjustments for the on-chain analytics.
So you're essentially needing to.
Your existing tech stack, your existing compliance workflows with the twists that need to take account for the digital assets and the on-chain analytics, and that framing really adheres with what we've been seeing in terms of regulatory requirements, the Genius Act coming out of Washington, and really helps institutions step into the space more confidently, safely and comfortably.
Yeah, and speaking of regulation, if you take a look at some of the fireside chats, some of the sessions taking place in Money 2020, the term borderless, for example, or global globalization seemed to pop up, but with that comes risks.
So tell me about what we need to understand when it comes to jurisdiction and regulation, not just state side, but also across the Atlantic and across the Pacific.
Absolutely.
And this is a global conference coming out of Vegas, right, exactly as you said, it's borderless.
Digital assets are borderless in a sense that you can send within minutes, seconds, funds across the globe, and that's where the use cases of remittances will come in and all of that are coming into play.
From a regulatory perspective, not all regulators are in sync.
We're seeing that there's a concern with some regulators that are maybe not keeping up at pace or perhaps it's.
Not a priority for their jurisdiction at the moment, which means that funds are traveling globally with different environments and different knowledge bases within those countries to address them.
Some countries are able to step up and manage those risks because they're aware, they understand, they have the education.
Other regulators have still some time that they need to process what it means to put in place legislation, to put in place procedures, and do additional rulemaking.
And businesses may engage in regulatory arbitrage, which is to go around different regulators, um, so, so just like not all businesses operate in the same, not all regulators are operating the same, and it's so new and growing, right?
So, so it's all just a nascent and evolving space.
And Leah, finally, I do want to round out our discussion by talking about what's happening in the nation's capital.
So the US government shutdown does continue as Money 2020 gets underway here in Las Vegas, but in your role as VP of uh global policy and regulation, give us an understanding of what's happening on the innovation front and what really needs to happen when it comes to regulation here in the US, right, so this summer.
We passed some big legislation pieces, and the next step after that legislation has to be the agencies, the regulators that are coming out with rulemaking, rulemaking proposals, consulting with the industry.
Some of that is happening, but because of the government shutdown, we're also seeing that some of that is on pause.
I would suggest that maybe this gives an opportunity for banks and financial institutions to quickly learn and upskill teams and ramp up silver lining, but definitely the opportunity.
While the shutdown continues and as regulators come back to work, this is an opportunity for banks to really kind of step up their game, take the time that they have to learn and educate, understand their compliance obligations, understand the legislation, understand where they could be tweaking their compliance programs to prepare for the innovations that are coming, source of wealth, source of funds and digital assets.
Those are big questions for wealth management teams understanding how to do.
Management in a digital asset world.
Those are big questions for for banks and their sanctions teams.
So just pursuing those kind of lines and preparing for the day in which the shutdown ends and regulators are back in their seats doing their rulemaking.
Eli, a lot of moving parts as you mentioned, so thank you so much for simplifying all these parts, and I appreciate all of your insights and for you taking time out of your busy schedule here at Buddy 2020.
Thank you, Remy.
Have a great conference.
Thank you.
