The Securities and Exchange Commission’s Division of Examinations has outlined its 2024 Examination Priorities, with a significant focus on cryptocurrency, emerging technology, and Anti-Money Laundering (AML) laws. This has important implications for financial services. Our Regulatory Oversight blog has the details; key highlights are below.
Examinations will focus on the offer, sale, recommendation, and trading of crypto assets. This includes assessing whether financial service providers meet their standards of conduct when advising on crypto products, and whether they routinely review and enhance their compliance practices. Technological risks associated with blockchain and distributed ledger technology will also be examined.
Emerging technology is another area of focus. The SEC will pay attention to financial service providers leveraging mobile applications and automated investment advice. This highlights the need for these services to ensure robust compliance measures are in place, particularly as they adopt new technologies.
AML compliance is also a key area. The SEC will review whether financial service providers are appropriately tailoring their AML programs, conducting independent testing, establishing adequate customer identification programs, and meeting suspicious activity report obligations.
The report underscores the SEC’s commitment to closely monitor the impact of digital assets and emerging technologies on consumer financial services. Proactive compliance measures are essential for these services to successfully navigate future examinations.