"The Age of Crypto-Lawyers"
Financial technology does not stand still, the financial services market is in the process of active transformation. Classic financial services are complemented by new tools.
More and more financial institutions are paying attention to blockchain technology, private investors are enthusiastically investing in cryptocurrency.
At the same time, rapid and significant growth carries certain risks for all participants in the market of innovative financial technologies. Let us dwell on some of them:
In the first half of the world, three times more cryptocurrencies were stolen than in the whole of 2017. Pretty scary indicator. This indicator suggests that investors can lose their investment overnight, and there are many fraudsters on the market who try to avoid the requirements of the law or take advantage of its lack of sophistication.
Together with low financial literacy of the population, the consequences of such actions can be compared with the consequences of the activities of MMM.
Innovative technologies are interesting not only for legal businesses, but also for fraudsters looking for new tools for their criminal schemes. So, tools can be used for criminal purposes, such as money laundering or terrorist financing, which is caused by high levels of anonymity and weak regulation of new tools. For example, according to the information of the Federal Bureau of Investigation of the United States (FBI, Federal Bureau of Investigation), this department has more than 130 open cases related to virtual currency. As part of these measures, for 2018, the FBI requested an additional $ 21 million and 80 new employees to expand investigations into new technologies and combat cybercrime.
Representatives of the department note that the blockchain technology, although more convenient than cash in terms of tracking, is nevertheless anonymous in nature, which complicates the investigation process.
These events are characteristic not only for the United States, but are generally relevant for other countries.
With an open economy.
New fintech companies and industry pioneers seek to seize their niche in this market, as well as crowd out traditional financial organizations. New startups are designed to provide consumers with innovative and more convenient tools based on new technologies.
Of course, fintech companies offer very interesting solutions that find the corresponding consumers. In particular, in the field of online lending or payments and a capitalization companies. The convenience of these solutions has a positive effect on the capitalization of such companies.
As a rule, many fintech companies are inherently IT companies with full-time lawyers who do not always have the necessary knowledge in the field of IT, financial technology innovations. This fact, namely the lack of professional personnel, carries great risks for such companies.
Fintech industry is developing and expanding every year. Accordingly, it is logical that state regulators of different countries of the world will pursue policies to tighten existing legislation on the provision and use of financial instruments, and the activities of fintech companies. In particular, for regulators, questions are always a priority:
1. Maximum security of investments of users of financial services
2. Maximum security of the financial sector of the country
3. Assessing new products at risk of money laundering and terrorist financing,as well as minimizing or eliminating them
The above measures will almost certainly be implemented by formalizing new requirements and prohibitions in the legislation, the creation of appropriate control mechanisms.
The financial sector has always been seriously controlled, so fintech companies will be forced to increase their human resources in these matters.
The implementation of these requirements is the main task of the organization’s lawyer. Thus, understanding of innovations in the financial market is becoming one of the most important parts of a professional background of a lawyer (or a compliance specialist) working in a fintech company or otherwise encountering their activities.
Given the above, the issue of training professionals who are able to use knowledge in the field of jurisprudence and financial technologies to develop innovative products is already relevant
and protect the interests of your company and customers. Companies must cultivate or hire such specialists, and the specialists themselves must be in a state of constant development.
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