On May 1, 2025, the Financial Crimes Enforcement Network (FinCEN) released a Notice of Proposed Rulemaking (NPRM) regarding the Huione Group, a foreign financial institution located in Cambodia. This proposal, enacted under section 311 of the USA PATRIOT Act, suggests prohibiting U.S. financial institutions from forming or maintaining correspondent banking relationships with Huione Group. The
In a significant policy shift, Deputy Attorney General Todd Blanche issued a memorandum titled “Ending Regulation By Prosecution,” on April 7, 2025, signaling a change in the Department of Justice’s (DOJ) approach to digital assets. The memorandum, outlines a move away from the previous administration’s enforcement efforts, which the memo called “reckless” and “ill conceived
On March 13, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which aims to establish a regulatory framework for payment stablecoins, passed the United States Committee on Banking, Housing, and Urban Affairs with a bipartisan 18-6 vote, paving the way for Congressional approval. The bill was introduced and sponsored by Senator
On March 7, 2025, the Office of the Comptroller of the Currency (“OCC”) released Interpretive Letter 1183, marking a pivotal change in regulatory guidance for national banks and federal savings associations engaging in cryptocurrency activities. This recent directive, issued under Acting Comptroller Rodney Hood, rescinds the requirements set by Interpretive Letter 1179 from November
Brink’s Global Services USA (“BGS USA”), a global leader in secure logistics, found itself at the center of a significant regulatory investigation due to its failure to meet anti-money laundering (“AML”) obligations. Specifically, BGS USA was found to have violated several provisions of the Bank Secrecy Act (“BSA”), leading to actions by both the U.S.
In a closely watched and complicated case, Van Loon et al. v. Dep’t of the Treasury et al., the U.S. Court of Appeals for the Fifth Circuit ruled that the Office of Foreign Assets Control (“OFAC”) cannot sanction Tornado Cash, “an open-source, crypto-transactions software protocol that facilitates anonymous transactions by obfuscating the origins and destinations of digital asset transfers.” The opinion, which reversed the ruling of the District Court, is here. A recording of the oral argument is here. The opinion is complex but written in a very clear style.
We previously blogged on OFAC’s designation of Tornado Cash (here) and the resulting civil suit (here). We also covered the indictment returned against the alleged developers of Tornado Cash, Roman Storm and Roman Semenov, who were charged with conspiring to commit money laundering, operating an unlicensed money transmitting business, and violating sanctions under the International Emergency Economic Powers Act, or IEEPA (here). The DOJ subsequently obtained a superseding indictment against Storm only (here); Storm’s trial currently is scheduled for April 2025). When the initial indictment was unsealed, Treasury simultaneously sanctioned Semenov, who remains outside the U.S., by adding him to OFAC’s Specially Designated Nationals and Blocked Persons (“SDN”) List.
These actions are a reminder that, putting aside the complex issues presented by the Fifth Circuit decision regarding OFAC’s (in)ability to sanction a technology, law enforcement and regulators still can pursue people for related alleged conduct. And, invariably, people are involved in a technology.
Continue Reading Fifth Circuit Rejects OFAC Designation of Tornado Cash Immutable Smart Contracts
On October 22, 2024, the U.S. Court of Appeals for the Second Circuit ruled that Türkiye Halk Bankası A.Ş. (“Halkbank”), owned by the Republic of Turkey, can be prosecuted for allegedly helping Iran evade U.S. sanctions and committing related money laundering and bank fraud.
The court rejected Halkbank’s claim of immunity, stating that foreign state-owned companies are not protected from prosecution for commercial, non-governmental activities under U.S. common law. This decision allows U.S. prosecutors to pursue charges against Halkbank for allegedly laundering $20 billion of restricted funds through the use of money services businesses and front companies, coupled with the making of false statements to the U.S. Department of the Treasury regarding transactions with Iran to conceal the scheme.
The Second Circuit’s ruling underscores a pivotal point: foreign state-owned corporations cannot claim blanket immunity from prosecution in the U.S. for commercial activities under either the common law or the Foreign Sovereign Immunities Act (“FSIA”). This will be particularly true in cases involving charges of money laundering, which necessarily involve financial transactions. Further, the alleged involvement of foreign government officials in the charged schemes will not bestow, standing alone, immunity from prosecution.
Continue Reading Halkbank Faces Prosecution: U.S. Court of Appeals Denies Sovereign Immunity
On August 27, 2024, the New York State Department of Financial Services (“NYDFS”) announced a consent order involving a $35 million settlement with Nordea Bank Abp (“Nordea”) for alleged significant failures related to anti-money laundering (“AML”) compliance. Nordea, headquartered in Helsinki, Finland, operates globally, including through a licensed branch in New York, which has its own AML and transaction monitoring requirements.
The enforcement action, which followed revelations from the Panama Papers leak, found that Nordea allegedly failed to conduct proper due diligence on high-risk correspondent banking relationships and maintained inadequate AML controls. According to the NYDFS, the Panama Papers implicated Nordea in aiding clients in establishing offshore shell companies in order to facilitate illicit activities.
The consent order alleges that Nordea violated New York law by allowing compliance failures in its AML program and procedures to persist. Meanwhile, Danish officials recently charged Nordea with repeatedly violating Denmark’s anti-money laundering act between 2012 and 2015, thereby exposing Nordea, potentially, to extremely significant fines. As we will discuss, although the consent order implicates many different issues, the NYDFS enforcement action represents, in part, the latest chapter in the continued fall-out from the massive AML scandal involving Dankse Bank. The consent order also highlights, once again, the particular risks posed by correspondent banking relationships, on which we repeatedly have blogged (for example, here, here, and here).
Continue Reading NYDFS Imposes $35 Million Fine on Nordea Bank for Alleged AML Failures Following Panama Papers Revelations
On June 20, 2024, the Financial Crimes Enforcement Network (“FinCEN”) issued a supplemental advisory to alert U.S. financial institutions about emerging trends in the illicit fentanyl supply chain. The supplemental advisory emphasized the increasing involvement of Mexico-based transnational criminal organizations (“TCOs”) in the procurement of fentanyl precursor chemicals and manufacturing equipment from suppliers in the People’s Republic of China (“PRC”).
The detailed supplemental advisory builds upon FinCEN’s 2019 advisory (see our blog post here) by introducing new typologies and red flags for financial institutions to try to identify and report suspicious transactions. As we discuss, the supplemental advisory was accompanied by related actions by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the U.S. Department of Justice (“DOJ”) as part of an apparently coordinated effort by the federal government to combat this pernicious illicit industry.
Continue Reading FinCEN Issues Supplemental Advisory on Fentanyl Distribution and Growing Role of Transnational Criminal Organizations