DOJ Journal of Federal Law and Practice: Intro to the FinTech Ecosystem

Learn more about what the U.S. Department of Justice is thinking on FinTech and the law in this article by Karyn Kenny and her colleagues.  The full journal volume also contains articles on blockchain analysis, cryptocurrency and sex trafficking, investigations during the pandemic,  DOJ drones and more.

Karyn Kenny (Risky Woman to Watch) serves as the attaché at the US Embassy Croatia for the US Department of Justice’s Office of Overseas Prosecutorial Development Assistance and Training for South East Europe regional justice sector initiative, overseeing the anti money laundering, asset forfeiture, anti corruption and transnational organized crime portfolios. Previously, she served as the attorney advisor for general counterterrorism programs and served as the resident legal advisor for two US embassies. Karyn is the recipient of the US Department of State’s meritorious Honor Award for creating the US Bangladesh bilateral banking sector dialogue. In 2020, she designed and taught the first webinar for the US federal prosecutors, analysts and investigators at the Department of Justice national Advocacy Center and launched the first public private FinTech Partnership Dialogue.

Includes

• What is FinTech?
• FinTech vs. legacy bank culture
• FinTech’s impact on traditional investigatory and prosecutorial practices
• The FinTech sector and money laundering and terrorist financing risks
• DOJ OPDAT FinTech Dialogue: an international public / private AML / CTF partnership
• The future rise of open banking and TechFins

Extract

Within the law enforcement community, there exists either an unawareness, or at best a knowledge deficit, of what the FinTech sector is, how it operates, and what the associated AML/CTF risk factors are. Compounding this challenge is the inherent divide between the government and private sector FinTech communities. To address these issues, in January 2020, The Department’s Office of Overseas Prosecutorial Development, Assistance, and Training created the DOJ OPDAT FinTech AML/CTF Dialogue Partnership (OPDAT-FT), specifically aimed at the international AML/CFT community.

The goal of the OPDAT-FT is to establish a sustainable communication platform to facilitate the exchange of information between government entities and the FinTech private sector. Meeting on a quarterly basis, the OPDAT-FT allows international government officials (prosecutors, banking regulators, etc.) and members of the global FinTech community to exchange ideas and improve understanding in a mutually beneficial environment. By providing a collaborative framework for the two sectors, the OPDAT-FT promotes the exchange of experiences to better define and implement AML/CTF safeguards within the international FinTech space.

Working in collaboration with the Federal Reserve Bank of New York, the OPDAT-FT formally launched in January 2020 to gain insight, relying on industry specialists and how FinTech products can be leveraged to combat AML/CFT, including information sharing and best practices. Participants at the launch included U.S. representatives, a FinTech start-up CEO from Singapore, global management consulting firms, and online payment companies. The second OPDAT-FT dialogue, held in September 2020, had representatives from the United States, Latin America, Europe, and southeast Asia in attendance.