Ep #56 with Chengyi Ong (Chainalysis)

Chengyi Ong leads public policy in the Asia-Pacific region for Chainalysis out of from the firm’s regional headquarters in Singapore. Drawing on Chainalysis’ blockchain data analytics platform, she works with public and private sector stakeholders to distil developments in digital asset markets, and their intersections with global and regional regulatory trends.

Prior to joining Chainalysis, Chengyi spent 13 years at the Monetary Authority of Singapore, holding roles in financial regulation and supervision, financial sector development, and central banking. She also served as the Advisor to the Executive Director for Southeast Asia at the International Monetary Fund.

In this episode of Regulatory Ramblings, she talks to host Ajay Shamdasani about the intersection of money laundering, financial crime and cryptocurrencies.

The conversation begins with Chengyi describing her upbringing, formative years, choice of career path and her time as a regulator at the MAS. She then goes on to talk about what Chainalysis does, its market position, and her interest in the digital asset sector.

She shares her views on the rising levels of both crypto native and non-crypto native money laundering, why such trends are growing and the types of crimes emanating from Asia – making reference to key findings from Chainalysis’ recent report on the matter, including the 2024 Crypto Crime Report and the 2024 Crypto Money Laundering Report.

Chengyi also discusses her thoughts on stablecoins being used for money laundering, what her firm’s report says about the destination of illicit funds and what the best ways are to prevent crypto native money laundering – especially in the Asia-Pacific. To that end, she is candid about what regional regulators should do to tackle this issue, noting that more needs to be done. What ensues is a deeper chat about what the role of regulators in ferreting out financial crime should be vis a vis cryptocurrency exchanges and financial institutions – the latter of which are financial gatekeepers in their own right.

The conversation concludes with Chengyi reflecting on the arc of her career and how AML regulations have evolved in APAC over the years. She stresses that in an age of aggressive enforcement actions, sanctions and not insubstantial fines, it will be imperative for organizations to verify the entities that are transacting and engaging with. She offers some suggestions as to how they may do so.

HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep 55 with Angela Ang, Senior Policy Advisor, TRM Labs

Angela Ang is the Senior Policy Advisor at TRM Labs, a global blockchain intelligence company, and a former regulator at the Monetary Authority of Singapore (MAS). Having spent over a decade at MAS, she held the role of Deputy Director in charge of licensing payments and crypto service providers. Angela has also been recognized as a LinkedIn Top Voice for Finance in Asia for her leadership in digital asset developments.

In this episode, Angela reflects on her journey from growing up in Singapore to her education at INSEAD, and her early career at MAS, where she helped promote Singapore as an international financial hub. As a former regulator, she highlights the unique experience of policymaking at a high level and emphasizes that despite the intellectual rigor, regulators are still people, too.

The discussion shifts to TRM Labs and its role in blockchain intelligence. Angela explains that “Blockchain analytics is like Google Maps for blockchain,” helping clients understand blockchain data to combat fraud and financial crime. While blockchain’s ledger is immutable, clients often struggle to interpret it, and TRM adds context to provide a clearer picture.

Angela draws parallels between her work at MAS and TRM Labs, highlighting the compliance-centric and mission-driven nature of both organizations. She notes that TRM Labs’ nimbleness and entrepreneurial spirit, combined with its focus on integrity, attract former public sector staff.

Angela recalls her first exposure to cryptocurrencies and blockchain in 2015 while researching for MAS. She emphasizes the balance between blockchain’s promise and the risks associated with crypto speculation, echoing Singapore’s prudent regulatory stance on innovation vs. speculation.

She also touches on Asia’s regulatory landscape, noting how the region leads in regulatory clarity. Singapore and Japan pioneered crypto regulation, recognizing the importance of creating robust rules to protect investors. She cites examples like Singapore’s crypto custody rules and Hong Kong’s virtual asset service provider licensing regime.

Angela discusses the global trend toward tighter crypto regulation, with an 80% shift toward stricter controls and consumer protection. She points out that regulation is crucial for preventing illicit activity, but it requires sufficient enforcement and skilled people to ensure compliance.

The conversation then covers the talent shortage in crypto compliance. While older compliance principles still apply, the unique challenges of blockchain technology require specialized expertise. Angela also discusses the importance of SupTech and RegTech, noting TRM Labs’ role in real-time blockchain monitoring tools for both compliance professionals and regulators.

Despite concerns about crypto-related crime, Angela highlights that only 0.63% of global crypto activity involves crime, a figure comparable to traditional finance. She notes that proper licensing and risk controls reduce crime in regulated jurisdictions and emphasizes that most exchanges now have some level of compliance.

Looking forward, Angela identifies market misconduct as an emerging issue in digital finance, with global regulatory bodies like IOSCO prioritizing it in their work.

HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #54 With David Caruso, Dominion Advisory Group

In this episode of Regulatory Ramblings, David Caruso, a former U.S. Secret Service agent turned global financial crime fighter, shares insights from his 30-year journey in AML and financial crime compliance. With an impressive career, including time as chief compliance officer at Riggs Bank, David recounts his pivotal role in uncovering corruption scandals involving Equatorial Guinea and former Chilean dictator Augusto Pinochet. These investigations sparked significant U.S. regulatory and legal actions, influencing AML enforcement on a global scale.

David reflects on the evolution of financial crime compliance, pointing to key regulations like the Bank Secrecy Act, USA PATRIOT Act, and FATCA. He critiques how the increasingly regulatory-driven focus has distracted AML teams from their primary mission. He also shares his concerns about international policy-setting bodies, such as the Financial Action Task Force (FATF), questioning whether new rules are truly effective in preventing financial crime or unintentionally stifling economic growth.

The discussion wraps up with David’s views on the limited success of sanctions against Russia, the potential of AI in AML/KYC compliance, and his policy recommendations moving forward.

David Caruso is the founder and managing director of Dominion Advisory Group, helping banks across the U.S., Europe, and Asia navigate financial crime risk and compliance. With a background as a U.S. Secret Service agent and a degree from George Washington University, he has been at the forefront of shaping financial crime compliance since 1996, advising global institutions and building AML programs at major banks.

For more details about the contents of this podcast, please visit: www.hkufintech.com/regulatoryramblings

HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.