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AML for a blockchain age
Journal of Financial Compliance,
7
(2),
148-159
(2023)
Abstract
Blockchain technology is not only unlocking important innovations in financial systems, it is also the foundation for powerful new tools used to combat illicit finance. This paper describes some of the ways that this technology not only enhances traditional compliance tools but also goes further, offering investigators unprecedented access to transactional data. The result is that virtual asset service providers, unlike traditional financial institutions, are not limited to static or opaque stores of customer information but can instead conduct more sophisticated analyses that are faster, more reliable and more dynamic than what was previously available. Given this new compliance landscape, this paper sheds light on where the most significant illicit finance threats are in the cryptocurrency ecosystem and, further, how regulators can support the development and adoption of powerful new compliance tools, including those using novel digital identity systems.
Keywords: virtual assets; cryptocurrency; virtual asset service provider; VASP; blockchain analytics; know your transaction; KYT; decentralised identity; DID
The full article is available to subscribers to the journal.
Author's Biography
Neal Christiansen is Senior Counsel on Coinbase's Financial Crimes Legal team, with a subject-matter focus on anti-money laundering, economic sanctions and the Bank Secrecy Act. He regularly advises and supports on matters related to financial crimes prevention and regulations, including the Travel Rule and emerging blockchain technologies. Prior to joining Coinbase in 2021, he spent over seven years as a federal prosecutor with the US Department of Justice, where his practice focused on money laundering, cryptocurrency and investigations of global financial institutions. Neal has also trained law enforcement, regulatory and private industry stakeholders on topics including the regulation and seizure of cryptocurrency. He is a graduate of Cornell Law School and the Johns Hopkins School of Advanced International Studies.
Valerie-Leila Jaber is the Global Head of Financial Crime Compliance, responsible for the anti-money laundering, sanctions and anti-bribery and corruption programmes. She joined Coinbase in June 2020. Valerie was previously at Credit Suisse as Managing Director and Head of Financial Crime Compliance for the Americas Region. Prior to Credit Suisse, Valerie was the Global Head of Financial Crime Compliance for the Asset Management sector at JPMorgan Chase. Previous to JPMorgan Chase, Valerie was the Head of Financial Crime Compliance for Barclays Wealth & Investment Management based in London. She joined Barclays after ten years at Citi in New York where she held various roles in Legal and Compliance, including Deputy General Counsel for AML for the Global Wealth Management business. Prior to joining Citi, Valerie held positions in the Enforcement Division of Financial Industry Regulatory Authority and as a litigation attorney with two US law firms. Valerie also spent six years as an Adjunct Professor at Fordham Law School. Valerie holds a Bachelor of Arts in Political Science from Fordham University and received her law degree from Fordham Law School.
Grant Rabenn is the Director of Financial Crimes Legal at Coinbase, where he leads the company's legal team responsible for advising on anti-money laundering, sanctions, and regulatory compliance and advocacy. He joined Coinbase in March 2021. Prior to Coinbase, he served for a decade as a federal prosecutor in the Eastern District of California, where he held leadership positions in money laundering and cybercrime task forces. He was a lead attorney on the global investigation and prosecution of AlphaBay, the world's largest darkweb marketplace, for which he received numerous commendations, including the FBI Director's Award and the Attorney General's Award (the highest award given to federal prosecutors). His work as a prosecutor is profiled in the book ‘Tracers in the Dark’, which chronicles the federal government's early response to cryptocurrency money laundering. He is a graduate of the Georgetown University Law Center (cum laude) and the University of California, Los Angeles (magna cum laude).
Melissa Strait is a leader in FinTech compliance, having built and overseen compliance programmes at top-tier FinTech and cryptocurrency firms. Currently, she serves as the Chief Compliance Officer of Coinbase, a position she has held since February 2021. In this capacity, Melissa oversees all aspects of Coinbase's Global Compliance Program, including efforts related to anti-money laundering, counter terrorism, sanctions, and anti-bribery and corruption. Previously, she served as Global Head of Financial Crimes for Stripe, Inc., as well as the Chief Compliance Officer of Stripe Payments Company, a licensed money transmitter. Prior to joining Stripe in early 2016, she was a Compliance Operations Manager for Block (formerly known as Square). At these firms, Melissa led ground-up builds of anti-financial crime programmes tailored to their unique risks and characteristics. Melissa started her career at Kroll, where she was a Director in the Due Diligence practice. There, she managed teams producing in-depth due diligence research reports for banking and corporate clients, focused mainly in Asia and the Americas. She graduated from American University with degrees in international studies and Spanish.
