The latest in cryptocurrency recruitment

Deem NaPattaloong our consultant managing the role

We have already talked about how cryptocurrency impacts the fintech market. But 2021 was a very different time, investment was at record levels, Bitcoin was at an all time high and Elon Musk didn’t own Twitter. Cryptocurrency becoming mainstream, combined with the rise of the FinTech industry, meant that the average person could access and trade in crypto with newfound ease. 

Landmark legal rulings 

Earlier this week, there was a landmark legal ruling between the U.S. Securities and Exchange Commission and Ripple. In 2020 the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, its CEO Brad Garlinghouse and co-founder Chris Larsen, alleging failure to register its token XRP as a security before selling around $1.3 billion worth. What followed was years of Twitter spats and incremental legal advancements as Ripple attempted to argue how fundamentally incorrect it is to call XRP a security.

With last week’s news, XRP unsurprisingly rallied. Its token price nearly doubled and trading volumes exploded by an eye-watering 1,351%. But Thursday’s news has done nothing to make clear where crypto will stand in the eyes of U.S. law. We know where the SEC stands – everything is a security except Bitcoin and Ethereum – but the SEC is not the end all be all. 

Meanwhile in the UK,  Financial Conduct Authority (FCA) ) released a proposed guidance on social media financial promotions that targets promotional memes and financial influencers. The FCA said memes from crypto firms circulated online which many do not realize are subject to its promotional rules. It said promotional memes are particularly prevalent in the crypto sector and added any type of communication could be considered a financial promotion.

Increased regulation in crypto 

In our earlier article, we discussed the regulatory challenges surrounding crypto, and the digital assets, with the aim being to have crypto catch-up to traditional financial services regulatory obligations. And whilst the direction of travel is still clear, timelines are not. 

The EU is in advanced stages of finalising the new Markets in Crypto-Assets Regulation (MiCA), legislation which will be the basis for harmonised and comprehensive EU regulatory framework for crypto assets.  And in the UAE, regulators are creating the world’s first authority solely focused on digital assets. 

Locally, the FCA, announced new, near-final proposed rules, following recently-enacted secondary legislation, on financial promotion of crypto-assets within the country. Taken together with the passage of the UK Financial Services and Markets Act 2023 (the “2023 Act”) earlier this week, which brings crypto-assets under the UK’s broader financial regulatory regime contained in the UK Financial Services and Markets Act 2000 (“FSMA”), including FSMA’s rules on financial promotions, it is now all but inevitable that the FCA’s new rules, or ones very close to them, will be entering into force on schedule on or about October 8.

A poor economy for crypto talent 

Crypto exchanges and developers, like other FinTech start-ups have not been immune to the mass layoffs we have seen in the wider technology market. Coinbase, which is one of the more mainstream names in the market, has trimmed their workforce on several occasions in the past twelve months. 

The launch of Coinbase on the Nasdaq in April 2021 was hailed as a turning point for cryptocurrency. With its stock price closing at $328.28 on the first day of trading, the exchange had a market value of $86 billion. After 14 months, the corporation started to exhibit cracks as crypto winter unmistakably arrived. The company announced its Q1 2022 results in May, revealing a 27% drop in revenue from the prior year and a net loss of $430 million. 

But Coinbase is only one example of legitimate crypto businesses not finding their role in the world. Binance, the world’s largest crypto exchange is cutting its workforce by 1,000 people, and Gemini is also making significant cuts to their workforce. 

What once alluded to being a lucrative area for investors, has once again been doused with questions surrounding the longevity and sustainability of the industry. 

Risk, compliance and governance career opportunities c of cryptocurrency growth

London continues to dominate Europe’s fintech sector. With significantly more ongoing input from the FCA into this market, there is a constant demand for experienced governance professionals. While businesses are continuing to hire traditional governance professionals, such as, Head of Compliance, MLRO and Head of Risk, there has also been more of a focus on specialist professionals with anti-money laundering experience, such as, Combating the Financing of Terrorism (CFT), Transaction Monitoring, and Suspicious Activity Reports (SARs). It is often desirable that professionals with experience in these areas also have technology skills, for example coding language, or specific software knowledge.

Candidates looking to specialise in this discipline should try and focus on a combination of practical hands-on experience and relevant crypto qualifications from accredited bodies, such as, the International Compliance Association (ICA), and the Association of Certified Anti-Money Laundering Specialists (ACAMS).

Candidates should interview carefully with any start-up, and conduct due diligence, asking as many questions as possible to ensure there is sufficient funding and a quality strategic plan to support the growth of the business.

Get in touch to discuss your options

If you would like to discuss your career options in governance, compliance, risk, or financial crime, drop me a note and I would be happy to advise!
18/07/23
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