GinaShabana

California's new licensing regime for digital financial asset businesses is no longer on the horizon, it is here. The California Department of Financial Protection and Innovation (DFPI) opened its application portal last month, and the July 1, 2026 compliance deadline is now less than three months away. For companies that anticipate serving California residents with covered digital financial assets services, there is a significant advantage to having a license application in by July 1.

Under California’s new Digital Financial Assets Law, or DFAL, all entities engaging in “digital financial asset business activity” in the state must be licensed—or have a pending application—by July 1, 2026. On September 29, 2025, the California Department of Financial Protection and Innovation (DFPI) issued a Notice of Modification to Text of Proposed Regulation (Modification Notice) amending the previously issued April 4, 2025 Notice of Proposed Rulemaking.

On August 27 Associate Gina Shabana moderated an Association for Women in Cryptocurrency panel about the global crypto landscape. The panel discussed the shifting dynamics of US crypto and the practical implications of navigating an environment where regulatory intent is clear but specific rules are still emerging.

As artificial intelligence takes the world by storm, potential use cases proliferate by the day. Compliance professionals are looking closely at the tasks that AI technology may be able to perform, supplement and improve in their compliance processes.In this article, we examine the considerations around the use of AI in one important area in the regulatory and enforcement environment affecting financial services businesses — suspicious activity reports, or SARs.The filing of SARs, and failures r

Dually registered, or “dual hat,” investment advisers are already well aware of the extensive obligations imposed by the Bank Secrecy Act (“BSA”). But for others, the finalization of a Financial Crimes Enforcement Network (“FinCEN”) rule imposing anti-money-laundering obligations on a broader range of investment advisers may place them in an unfamiliar and heavily regulated territory. Below, we briefly recap the requirements of the rule we first outlined in its proposed form in our February 2024

Financial regulatory enforcement continues to be active this year, with approximately 18 anti-money laundering actions against financial institutions across federal regulators including the Financial Crimes Enforcement Network, the Federal Deposit Insurance Corp., the Federal Reserve Board, the Office of the Comptroller of the Currency, and the New York State Department of Financial Services, one of the most aggressive state regulators.With these actions, regulators are looking closely at custom

Self-disclosure and cooperation policies have been in the spotlight lately, as components of the U.S. Department of Justice, including several U.S. attorney's offices, have formalized and announced policies regarding self-disclosure and cooperation credit.On the other hand, some, but not all, financial regulatory agencies have policies or regulations providing for consideration of voluntary self-disclosures. As enforcement risk heats up for regulated financial institutions — from prudentially su

Earlier this month, approximately one year after releasing its proposed amendments to Regulation S-P, the SEC announced the adoption of final amendments to Regulation S-P, expanding the information protected, the policies and procedures required, and the entities covered by the rules.  Covered financial institutions—including any broker-dealer, investment company, registered investment adviser, or transfer agent—will now be required to establish and implement a reasonable incident response progr

In a sequel to FinCEN’s proposal earlier this year to extend anti-money laundering and Bank Secrecy Act regulations to investment advisers (AML/BSA Proposal), on May 13, 2024, FinCEN and the SEC jointly issued a new Notice of Proposed Rule Making. This rule would extend formal customer identification program (CIP) obligations to investment advisers, something not otherwise included in FinCEN’s earlier proposal. If adopted, certain investment advisers would be required to establish and maintain a

In its latest attempt, the U.S. Department of Treasury, Financial Crimes Enforcement Network (“FinCEN”), will require certain investment advisers to implement compliance measures to detect and report suspected money laundering and the financing of terrorism. The newly proposed rule brings investment advisers under the purview of the Bank Secrecy Act (“BSA”), which requires financial institutions to implement risk-based anti-money-laundering and counterterrorism programs to protect the national s

In recent guidance, the Financial Industry Regulatory Authority (FINRA) published the results of its targeted examination or “sweep” of crypto assets retail communications distributed or issued by its member firms, finding that 70% of the sampled communications contained potential violations of FINRA Rule 2210, which requires communication with the public to be fair and balanced, among other things. In issuing this guidance, FINRA outlined questions firms should be asking themselves—and that FIN

Financial regulators have laid out a road map of what to expect in 2024 through their blog posts, speeches, formal guidance, new regulations, and formal strategy and priority documents over the past year.

In coordinated actions, the New York State Department of Financial Services (NYDFS) and the Federal Reserve Board (FRB) fined the Industrial and Commercial Bank of China, Ltd. (ICBC) and its New York branch (Branch, a New York-based subsidiary) $30 million and approximately $2.4 million, respectively. The Branch, which operates under the jurisdiction of both examining authorities, was found to have improperly disclosed confidential supervisory information (CSI), backdated certain books and recor

As consumer-facing financial institutions of all types—from well-established banks to newly-launched fintechs—set their 2024 regulatory compliance goals, they may wonder if their New Year’s resolutions align with those that have been set by financial regulators for the upcoming year. In this article, we review the principles financial regulators outlined in 2023 guidance, regulation, and through individual enforcement actions, and highlight statements they have made in supervision and examinatio

With the start of the new year, FinCEN’s Beneficial Ownership Reporting Rule (BOI Reporting Rule) came into effect, implementing specific transparency requirements relating to corporate ownership. The BOI Reporting Rule arises from the Corporate Transparency Act, a component of the Anti-Money Laundering Act (AMLA) of 2020, which was aimed at making it more difficult for bad actors to hide or benefit from illicit proceeds by using shell companies or other structures to mask their interest. Effect

In their article for Law360, Partner Laurel Loomis Rimon, Associate Benjamin Seelig, and Department Counsel Gina Shabana provide analysis on what companies in the digital assets space can expect from two new virtual currency regulatory bills signed into law in California. 

In their article for Law360, Partner Laurel Loomis Rimon, Associate Benjamin Seelig, and Department Counsel Gina Shabana provide key takeaways that financial institutions can learn from regulators’ findings on Shinhan Bank America’s failures to develop and implement an effective anti-money laundering (AML) program.

After prolonged deliberation, California has finally decided to enter the virtual currency regulatory arena by adopting two virtual currency regulatory bills into law. The California Digital Financial Assets Law (“DFAL”), originally introduced as Assembly Bill 39 (“AB-39”), and Senate Bill No. 401 (titled “Digital Financial Asset Transaction Kiosks”) were signed into law on October 13, 2023, by Governor Gavin Newsom. The DFAL establishes a virtual currency regulatory regime similar to the New Yo

Shinhan Bank America (“Shinhan”), a New York-based subsidiary of a Korean bank, faced coordinated enforcement actions on September 29 from the Financial Crimes Enforcement Network (“FinCEN”), Federal Deposit Insurance Corporation (“FDIC”), and the New York Department of Financial Services (“NYDFS”). These concurrent actions resulted in a total of $25 million in civil penalties for failing to develop and implement an effective AML program in accordance with the Bank Secrecy Act (“BSA”) and New Yo

The New York Department of Financial Services (NYDFS) proudly announced an “update on [its] two-year transformational initiative to strengthen NYDFS’ nation-leading virtual currency oversight” on September 18, 2023. Although this milestone was the headline, the announcement also included significant new guidance in a number of key areas impacting virtual currency businesses that operate, or are thinking about operating, in New York. In particular, the new guidance describes NYDFS’ requirements f