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Key takeaways...
We recently gathered a group of regulatory attorneys from across Reed Smith to provide a rundown of the key trends to watch for in 2024 (if you missed the webinar, you can access the recording on demand).
Please see a short summary of our top takeaways below, and watch for an email invitation to the next installment of this quarterly series – we hope you can join us!
Cryptocurrency enforcement in the United States
- Significant uptick in crypto enforcement by DOJ, SEC, and CFTC in 2023
- Anticipate continued surge in crypto enforcement in 2024
- Crypto enforcement cases may also include significant bankruptcy activity, including FTX and Terraform Labs
Growing use of cryptocurrencies by transnational organized crime groups in Latin America
- Latin America provides fertile ground for adoption of cryptocurrencies
- Lack of regulation and enforcement in LATAM makes cryptocurrencies a tool for financial crimes
- Crypto companies should address these gaps by implementing appropriate policies and procedures, and by acquiring the necessary knowledge
DOJ Safe Harbor policy
- By offering presumption of criminal declination, DOJ is attempting to encourage cooperation and voluntary self-disclosure while providing clarity and predictability in its benefits
- Deadlines to self-disclose (six months from deal closing) and remediate (one year from deal closing) are aggressive but can be extended
- Criminal declination will require full cooperation and disgorgement of ill-gotten profits of acquired company
DOJ compensation incentives pilot program
- DOJ will reduce criminal penalties and otherwise offer credit for companies that opt to claw back compensation or attempt to do so
- The lodestar: the creation of a system that deters misconduct and promotes a culture of compliance
- Companies can start by examining executive compensation, evaluating a system for withholding bonuses, articulating a standard for triggering compensation clawback, and updating their employment materials
UK extension of corporate criminal liability
- Introduction of a new “failure to prevent fraud” offense later in 2024, which will widen the scope of corporate criminal liability
- New offense making corporates liable for the economic crimes of their “senior managers” has also significantly broadened the scope of corporate liability and a renewed focus on the role of senior management
- The increased scope for liability will require organizations to review their policies and procedures in detail to cover increased risk
Client Alert 2024-024
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