Late last month, FinCEN Director, Jennifer Shasky Calvery, announced she was stepping down at the end of May to take a job in the private sector.
In just three short years as director, Calvery accomplished a great deal! She inherited a relatively obscure financial regulatory agency, which according to many in the compliance community had lost its way. That never seemed to faze Calvery who completed the complete reorganization of FinCEN, empowering and enhancing the resources of its newly minted enforcement division. During her tenure, FinCEN issued big money penalties against HSBC and JP Morgan, as well as small casinos and money transmitters. The latter were part of Director Calvery’s mandate to raise the AML compliance bar on non-financial or non-traditional financial entities. This, of course, included the March 2013 guidance directed at the bitcoin community. Calvery, it seemed, not only put AML on the compliance map but bitcoin too.
Under Calvery, AML regained renewed importance and reshaped the way financial institutions conducted their business. Unfortunately to many, this came at a steep price. “De-risking” became a household term within both the legacy money transmitter and bitcoin space. Raising the regulatory bar had the unintended consequence of denying bitcoin exchanges, bitcoin ATM operators and, in some cases, bitcoin enthusiasts’ access to traditional banking. Nevertheless, Calvery remained consistent in her words and actions as the director. More often than not, for those that tuned in, she seemed to deliberately choreograph the moves of FinCEN ahead of time, allowing regulated entities to improve themselves and thereby remove the “gotcha game” come exam time. It’s amazing how much knowledge can be gleaned from a speech transcript, interview, formal guidance, or enforcement action, including most notably the Ripple settlement. Let’s hope the next FinCEN director continues to build upon this approach as the bitcoin space grows and matures.
