Our recent webinar with ZenLedger, “A Deep Dive Into Digital Assets: How to Evolve Your Firm and Maintain Compliance,” addressed the many crypto questions posed by the industry, offered valuable insights into digital assets, and explored the challenges and opportunities they present for compliance professionals and investment advisers.
The webinar, which featured COMPLY Chief Product Officer David Bliss, COMPLY Senior Consultant Hovig Melkonian, and ZenLedger Chief Financial Officer Jonté Harrell, included so many gems we couldn’t bear for you to miss – so here they are!
What you should know about digital assets and employee trade monitoring
Let’s dive into the top six takeaways:
1. Get ready for crypto’s growing popularity.
While only 17% of our participants indicated that they currently advise on or trade in digital assets, experts predict this number will rise significantly due to factors like the recent approval of cryptocurrency ETFs.
2. Understand what digital assets are.
Because digital assets are relatively new, there’s confusion about what exactly they are. Let’s break it down for you: Not every digital asset is a cryptocurrency. Digital assets are a broader category encompassing anything digital with value, ownership, and discoverability, including things like photos and data. Cryptocurrencies, however, are a specific type of digital asset built on a decentralized network.
3. Regulators are increasingly focusing on crypto compliance.
While cryptocurrency regulations remain somewhat unclear, they are not entirely absent. Regulatory bodies like FINRA and the SEC are increasingly focusing on crypto compliance, issuing guidelines and enforcement actions for non-compliance.
4. Your firm will have to weigh the pros and cons of offering digital assets.
Firms must carefully consider the advantages and disadvantages before offering digital assets to clients. Potential benefits include responding to client demand, gaining a competitive edge, and attracting new clients. However, challenges include navigating unclear regulations, potential future regulatory changes, and the need for significant investments in compliance and operational infrastructure.
5. Prioritize employee trade [BF1] monitoring.
Our speakers repeatedly emphasized the importance of establishing controls and procedures for monitoring employees’ outside crypto-related activities. This goes beyond just training and guidance, and should involve implementing clear policies, procedures, and controls.
6. Developing effective monitoring policies requires some key considerations.
When establishing policies and monitoring plans for employee crypto activities, firms need to find a balance between risk mitigation, cost, and employee engagement. Key considerations include the firm’s current and future involvement with digital assets, employee sentiment toward crypto investing, and how the firm wants to approach these issues in the coming years.
Employee Digital Asset Trade Monitoring with COMPLY
It’s clear that employee crypto trade monitoring is not a matter of “if” but “when” for most firms. This is where COMPLY steps in!
Our comprehensive and reliable solutions are tailored to address the specific challenges your firm might face, empowering your firm to evolve with the market while maintaining critical compliance. The COMPLY™ Digital Asset Trade Monitoring solution – which goes beyond basic monitoring by providing features like automatic capture of transactions and holdings, real-time accuracy, pre-clearance workflows, and comprehensive coverage of exchanges and wallets – is the only solution on the market to bridge the divide between regulatory technology and crypto compliance. The best part? With COMPLY, you can automatically capture transactions and holdings AND monitor them for alignment with firm policies and procedures. Additionally, it simplifies documentation by automatically logging all actions within the software, saving valuable time and resources.
By choosing COMPLY, you gain a trusted partner with the expertise and technology to navigate the complexities of employee crypto trade monitoring with confidence.
Ready to explore how COMPLY can help your firm? Let’s talk!