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Regulatory Ramblings

Regulatory Ramblings: Episode 66 – The U.S. Strategic Reserve and the Emerging Multipolar Crypto World + Recent Developments in US Virtual Asset Regulation with Henri Arslanian and Andrew Fei

The overarching theme of this episode is US President Donald Trump’s recent announcement that the country would create a bitcoin reserve—a veritable Fort Knox-style depository comprised of several select cryptocurrencies. 

In our initial Spotlight segment, we’ll chat with Andrew Fei, a Hong Kong-based partner with the law firm King & Wood Mallesons, about developments in digital asset regulations in the US and what they mean for our region. 

Following that, we will have a lengthier chat with the doyen of all things Bitcoin and FinTech, Henri Arslanian, in Dubai about what the Trump administration’s actions towards virtual assets will mean for the Middle East and the world more broadly, from markets and policy perspectives.

Henri Arslanian

Henri Arslanian is the co-founder and managing partner of Nine Blocks Capital Management, one of the largest institutional-grade crypto hedge funds globally and the first crypto hedge fund to be licensed by Dubai’s Virtual Asset Regulatory Authority. He is also the Host of The Future of Money podcast.

Henri is an author, speaker, educator, and arguably one of the foremost fintech experts and evangelists. He is a TEDx and global keynote speaker, a best-selling published author, and regularly featured in global media, including Bloomberg, CNBC, CNN, BBC, The Wall Street Journal, The Economist, and the Financial Times.

His first book, “The Future of Finance: The Impact of FinTech, AI, and Crypto on Financial Services” (2019), was published by Palgrave Macmillan and ranked among Amazon’s global top 10 bestsellers in financial services, in addition to being recognized as one of the “Best FinTech Books of All Time” by Bookauthority.
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Henri is also an adjunct professor at HKU, where he teaches the world’s first university-level FinTech course. He advises many of the world’s leading crypto exchanges, investors, financial institutions, and tech firms on their FinTech and crypto initiatives, as well as numerous governments, regulators, and central banks on FinTech and crypto regulatory and policy matters.

He was previously PwC’s crypto leader and partner and is a former chairman of the FinTech Association of Hong Kong. Prior to joining PwC, Henri worked for a FinTech start-up and spent many years with UBS Investment Bank in Hong Kong. He started his career as a financial markets and funds lawyer in Canada and Hong Kong and speaks five languages: English, French, Armenian, Spanish, and Mandarin.

Andrew Fei

Andrew Fei has over 15 years of experience in financial regulation, digital assets, fintech, structured finance, syndicated loans, and debt capital markets. Based in Hong Kong, he has been with the law firm of King & Wood Mallesons for a decade and is currently a partner.

Andrew has advised many major financial institutions, corporations, and fintech companies on a wide range of innovative cross-border tokenization and digital asset transactions, structured finance and derivatives transactions, close-out netting and collateral arrangements, syndicated financing transactions, Basel III regulatory capital instruments, securities financing transactions, financial regulatory matters, as well as digital asset-related transactions and arrangements.

He has been quoted as an expert on various topics in the international press, including the Financial Times, New York Times, International Financial Law Review, Risk.net, and South China Morning Post.

Andrew holds a master of laws degree from Harvard Law School and a double 1st class honors bachelor of laws degree from Cambridge University, where he was ranked second. He is qualified to practice law in New York and Hong Kong. In addition to his full-time legal practice, Andrew teaches banking law at the University of Hong Kong Faculty of Law.

Discussion:

The episode opens with Andrew Fei discussing recent US crypto regulatory developments. Then, Henri Arslanian, a leading voice in global crypto circles, shares his insights on the Trump administration’s decision to establish a cryptocurrency strategic reserve of Bitcoin, Ethereum, Solana, XRP, and Cardano. “This really may start paving the way for other countries to look at potentially acquiring Bitcoin as part of their strategic… their basket of reserves,” he said, referring to the ripple effect the US reserve move could have on global sovereign crypto adoption.

In the Spotlight segment, Andrew discusses with Regulatory Ramblings host Ajay Shamdasani the implications of recent US regulatory developments for Asia, the Middle East, and the rest of the world, such as the GENIUS Act and the recent White House Crypto Summit in Washington, DC.

Henri then shares his thoughts on the Trump administration’s decision to create a reserve composed of Bitcoin, Ethereum, Solana, XRP, and Cardano. While acknowledging it is a significant step forward for crypto, he said the move is not without criticism because it begs why certain virtual assets were chosen for the reserve and not others.

Reflecting on the 2024 US Presidential Election, Henri stressed that concerns over which party would be friendlier to the industry were partly why the recent US presidential election swung in Donald Trump’s favor. For many single-issue voters, the future of digital currencies was their paramount concern. In that sense, it could be said that 2024 was the election that the crypto bros bought.

Henri also shares his thoughts on what it means for the rest of the world if the US creates its crypto reserve, stating that the entry of institutional and sovereign players hints at a more distributed global adoption trend.

While the idea of a strategic reserve for critical assets or commodities is not new, it is curious why President Trump did so now when he was vehemently against crypto during his first term (2017-21). The popular press has suggested that Silicon Valley power players such as Peter Thiel, Marc Andreessen, and Elon Musk helped Trump change his mind and bring him around to the cause.

As Henri wrote in a recent piece on LinkedIn, “We should expect criticism—rightly so—regarding how the included coins were selected for this reserve. Bitcoin makes complete sense. One could also argue for ETH and perhaps SOL. However, the inclusion of XRP and ADA will likely be questioned.”

Solana and Ethereum are two platforms used by many American firms, including important companies like Visa and Blackrock.

As Henri noted in his recent article, the presidential action prohibited the purchase of additional crypto without a specific executive or legislative action. Simply put: “The U.S. is not going to buy new Bitcoin but rather keep the 200,000 BTC it already holds mainly via the seizure of Silk Road assets and the recovery of the Bitfinex hack.”

Moreover, mainland China purportedly holds around 190,000 Bitcoins, primarily acquired through its 2019 seizure from the PlusToken Ponzi scheme, and the UK allegedly owns 60,000 seized Bitcoins.

Regulatory Ramblings podcasts is brought to you by The University of Hong Kong – Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.

Useful links in this episode:

  • Follow Henri Arslanian on LinkedIn

  • Nine Blocks Capital Management: Webpage

  • Book: The Future of Finance: The Impact of FinTech, AI, and Crypto on Financial Services, available at: Amazon

  • Follow Andrew Fei on LinkedIn

  • King & Wood Mallesons: Webpage

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Daily Compliance News

Daily Compliance News: February 28, 2025, The Extradited to China Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News—all from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top stories include:

  • Thailand Deports Uyghurs to China. (WSJ)
  • Trump revoked Chevron’s license to do business in Venezuela. (WSJ)
  • The cryptocurrency firm founder extradited to the US. (Reuters)
  • NJ men plead guilty to bribing at EWR. (InsiderNJ)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the FCPA Survival Guide on Amazon.com.

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2 Gurus Talk Compliance

2 Gurus Talk Compliance – The Snow in Florida Edition

What happens when two top compliance commentators get together? They talk compliance, of course. Join Tom Fox and Kristy Grant-Hart in 2 Gurus Talk Compliance as they discuss the latest compliance issues in this week’s episode!

Stories This Week Include:

  • DEI-reframing, not retreating.  (FT) and WVA replaces DEI with “Dept. of Engagement and Compliance”.  (12WBOY)
  • Trafigura and ex-COO were convicted of bribery.  (Bloomberg)
  • How Binance is ensuring compliance. (CoinPedia)
  • The CCO Departure Bonus.  (Cosmos)
  • Serbians are done with corruption.  (The Guardian)
  • Wells Fargo banks on (Not) risky business. (PYMNTS)
  • Crackdown on Tariff Exemption Snares U.S. E-Commerce Retailers (WSJ)
  • An investing revolution is coming. The U.S. isn’t ready for it. (The Washington Post)
  • The Sanctions Year in Review: DOJ Takes First Steps to Enforce “The New FCPA” While OFAC’s Enforcement Actions Decline (Volkov)
  • Fewer Americans Are Quitting Their Jobs (WSJ)
  • 1 arrested after snowballs thrown at Florida police officers, officials say (Fox 35 Orlando)

Resources:

Kristy Grant-Hart on LinkedIn

Spark Consulting

Prove Your Worth

Tom

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Blog

A Road Trip on the Crypto Regulatory Landscape: A Guide for Compliance and the Board of Directors

Securities and Exchange Commission (SEC) Commissioner Hester Peirce recently announced a ‘crypto road trip’ for the SEC and crypto industry. This trip includes a newly announced Crypto Task Force at the SEC, and she said it will “be more enjoyable and less risky than the crypto road trip the Commission has taken the industry on for the last decade.” She said, “On that last trip, the Commission refused to use regulatory tools at its disposal and incessantly slammed on the enforcement brakes as it lurched along a meandering route with a destination not discernible to anyone.”

Much like past road trips, the journey of crypto regulation has been unpredictable and challenging. In previous years, the SEC has navigated the crypto industry hesitantly, relying heavily on enforcement rather than clear regulatory guidance. However, with the introduction of the SEC’s Crypto Task Force, there is now an opportunity to develop a more structured, transparent, and effective regulatory framework.

Imagine you are a Chief Compliance Officer and get a call from the head of the Board of Directors’ Compliance Committee. They ask you what the company should do to prepare for this new ‘road trip.’ This blog post will provide an overview of the key regulatory challenges, risks, and strategic considerations that a Board of Directors should know as they oversee their organizations’ engagement with the evolving crypto landscape.

Where Did the Journey Start?

Since 2013, the first bitcoin exchange-traded product application was filed, and the SEC has approached crypto with a mix of enforcement actions, limited no-action letters, and ambiguous guidance. This has left many market participants uncertain about compliance requirements and legal risks. Key regulatory concerns include:

  • Legal Uncertainty: Ambiguities in applying securities laws, particularly through the Howey test, have created confusion regarding classifying crypto assets.
  • Enforcement-Driven Approach: Many regulatory decisions have been reactive, leading to litigation, stalled rulemaking, and business operational uncertainty.
  • Market Integrity and Fraud Prevention: The SEC remains committed to protecting investors by cracking down on fraudsters while balancing innovation.
  • Jurisdictional Overlap: The interplay between various regulatory agencies, such as the SEC, CFTC, and global regulators, adds complexity to compliance efforts.

The Crypto Task Force’s Objectives

The newly established Crypto Task Force is focused on developing a framework that:

  1. Defines the Security Status of Crypto Assets – Clarifying when digital assets fall under securities regulations.
  2. Creates a More Predictable Regulatory Environment – Establishing structured compliance requirements to guide businesses.
  3. Facilitates Responsible Market Innovation – Allowing for industry growth while protecting investors from fraud and abuse.
  4. Enhances Inter-Agency and Global Coordination – Ensuring crypto regulation is consistent across jurisdictions.
  5. Supports Transparent and Efficient Markets – Addressing market manipulation, custody solutions, and exchange-traded products.

Key Considerations for Boards

Corporate boards must take a proactive approach to navigating this changing landscape. Some critical areas of focus include:

  • Regulatory Compliance Readiness: Ensuring the organization has the necessary policies and procedures to comply with evolving crypto regulations.
  • Risk Management Strategies: Identifying crypto investments and transactions’ legal, financial, and reputational risks.
  • Engagement with Regulators: Encouraging dialogue with regulatory bodies to stay ahead of compliance expectations and contribute to policy discussions.
  • Governance and Oversight: Establishing clear accountability for crypto-related initiatives within the organization.
  • Investor and Stakeholder Communications: Being transparent with investors about how regulatory developments may impact business strategy.

Preparing for the Road Ahead

As regulatory clarity emerges, organizations should take the following steps:

  1. Monitor Regulatory Developments – Stay informed about SEC, CFTC, and international regulatory body updates.
  2. Develop a Compliance Framework – Implement internal controls that align with anticipated regulatory requirements.
  3. Assess Crypto Engagement Strategies – Determine how the organization should engage with crypto markets while balancing innovation and compliance.
  4. Educate Leadership and Stakeholders – Ensure board members, executives, and investors understand the regulatory landscape.
  5. Stay Agile – Be prepared to adjust business models as new rules and enforcement priorities take shape.

What about Compliance?

For good measure, you should add your thoughts about the role of compliance in this road trip for the new crypto regulatory paradigm. With greater regulatory scrutiny and the increasing use of technology in compliance, companies have an opportunity to bring structure and clarity to their compliance programs. But like any journey, knowing the destination is crucial, and so is staying aware of the risks and opportunities along the way.

Setting the GPS: The Role of a Strong Compliance Program

An effective compliance program is like a well-planned road trip; it ensures the organization stays on the right path while avoiding unnecessary detours. A well-designed compliance framework should focus on:

  1. Clear Regulatory Understanding – Organizations must stay informed about evolving laws and regulations that impact their industry. Regular monitoring and interpretation of compliance requirements are critical.
  2. Proactive Risk Management – It is key to identify and mitigate risks before they become major issues. Companies should implement risk assessments and compliance audits to maintain regulatory integrity.
  3. Robust Internal Controls – Just as road safety measures protect travelers, strong internal controls help businesses prevent fraud, misconduct, and regulatory violations.
  4. Employee Training and Awareness – Employees are the front line of compliance. Regular training ensures they understand policies and procedures and recognize compliance risks.
  5. Collaboration with Regulators and Industry Groups – Engaging with regulatory bodies and participating in industry discussions can help shape best practices and ensure a more transparent regulatory environment.

Pit Stops and Road Hazards: Compliance Challenges

For corporate leaders and compliance professionals, regulatory changes present opportunities and challenges. Some key takeaways include:

  • Different Compliance Requirements – Companies should expect increasing oversight and enforcement, requiring them to enhance their compliance efforts.
  • No Blanket Approval from the SEC – Just because an organization adheres to compliance regulations does not mean it is immune to scrutiny. Continuous improvement and adaptation are necessary.
  • A Shift Toward Proactive Compliance – Businesses should focus on building compliance into their operations from the start rather than waiting for enforcement actions.
  • Industry Engagement is Essential – Businesses that engage with regulators and industry peers can better anticipate regulatory trends and shape policy.

The SEC’s approach to crypto regulation is shifting from reactive enforcement to proactive rulemaking. While uncertainty remains, establishing the Crypto Task Force is a step toward greater clarity. Board members must stay informed and strategically align their organizations to navigate regulatory challenges while capitalizing on crypto innovation opportunities.

The road ahead requires vigilance, adaptability, and strong governance. Businesses can thrive in the evolving crypto regulatory environment by taking a proactive stance.

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Daily Compliance News

Daily Compliance News: January 14, 2025 – The RTO Compliance Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News—all from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top stories include:

  • Using AI as an excuse for ‘cost avoidance.’ (WSJ)
  • Crypto’s compliance conundrum. (CoinDesk)
  • Has corporate purpose lost its purpose? (FT)
  • Return To Office compliance. (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out The FCPA Survival Guide on Amazon.com.

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Classroom Insiders

Classroom Insiders, Season 2- Exploring Insider Trading and Cryptocurrencies: SEC v. Wahi

Welcome to Season 2 of Classroom Insiders, a podcast with Professor Karen Woody and her Insider Trading Seminar students from Washington and Lee University. They explore the arc and evolution of insider trading over the last century. Each episode will feature a discussion between Karen Woody and students about insider trading and regulation. Find out what the future lawyers of the university think about past and current legislation and learn more about this fascinating area of law.

In this episode of Classroom Insider, Professor Woody discusses insider trading with law students Cody and Kevin. The trio takes a deep dive into the SEC v. Wahi case. The case involves the Coinbase crypto trading platform, where insider information about cryptocurrency listings was leaked by an employee to friends, enabling them to trade and profit before the information became public. The discussion underscores the intertwining of classical and misappropriation theories of insider trading, especially in the novel context of cryptocurrencies.

The episode further delineates how the securities regulation landscape is adapting to new financial instruments like cryptocurrencies and NFTs, referencing cases like Chiarella, Carpenter, and Chastain to provide a comparative analysis. The conversation evokes critical thoughts on the SEC’s jurisdiction in crypto markets and whether such activities should be classified under insider trading laws. As the legal boundaries expand, the trio anticipates continuous evolution in regulatory approaches towards insider trading and cryptocurrencies.

Key Highlights

  • Case Introduction: SEC vs. Wahi
  • Details of the Case
  • Legal Theories and Jurisdiction
  • Opinions and Takeaways

Resources

Washington and Lee School of Law

Professor Karen Woody

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Daily Compliance News

Daily Compliance News: December 13, 2024 – The Token Fine Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News—all from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

  • Eric Trump drops hints of upcoming corruption. (TNR)
  • South African politicians slam token fine levied on McKinsey. (FT)
  • Fifth Circuit invalidates NASDEQ diversity requirements. (Reuters)
  • Ex-Trafigura COO says he was negligent, not criminal.  (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the entire 3-book series, The Compliance Kids, on Amazon.com.

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Daily Compliance News

Daily Compliance News: November 20, 2024 – The Mr. Non-Compliant Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News—all from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

  • Trafigura heads to trial in Switzerland. (Bloomberg)
  • A layer of crypto corruption. (TheBulwark)
  • Firings as layoffs without benefits. (FT)
  • KPMG rehabbed in the UK.  (FT)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the full 3-book series, The Compliance Kids, on Amazon.com.

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Daily Compliance News

Daily Compliance News: November 19, 2024 – The Corruption of Comedy Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News—all from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

  • Has Trump’s corruption comedy? (Salon)
  • Competitors to challenge the Elliott affiliate’s bid. (Reuters)
  • Hacker sentenced for Bitcoin heist. (BBC)
  • Will immigration enforcement shut down US industries?  (FT)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the full 3-book series, The Compliance Kids, on Amazon.com.

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Daily Compliance News

Daily Compliance News: October 23, 2024 – The Fired for Multitasking Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • EY fires staff who took multiple online training courses at the same time. (FT)
  • Harris looking at crypto friendly types to head SEC. (Unchained)
  • Investigation into Brazilian fighter jet sale. (ClearanceJobs)
  • Former A&F CEO arrested for sex trafficking. (WSJ)