Fintechs, Crypto

Cryptocurrency Regulation: How Evolving Regulations Affect Fintech Jobs

on

    More in Fintechs:

    As the cryptocurrency landscape matures, regulations are evolving globally, significantly impacting fintech jobs. This dynamic environment presents both challenges and opportunities for professionals in the fintech industry.

    Regulatory Landscape and Key Changes

    Global Developments: The regulatory frameworks for cryptocurrencies differ widely across different regions. The European Union, with its Markets in Crypto-Assets Regulation (MiCA), has implemented comprehensive rules requiring licensing for crypto service providers and rigorous customer verification processes. These measures aim to protect investors and prevent illicit activities such as money laundering and terrorism financing​.

    In Asia, the regulatory approaches are diverse. Japan recognizes cryptocurrency as legal property and enforces strict regulations to combat money laundering. Conversely, China has imposed stringent bans on crypto trading and mining, reflecting a cautious stance towards digital assets. South Korea is progressing with legislation aimed at enhancing transparency and user protection in crypto transactions​.

    In the United States, the regulatory environment is fragmented, with different agencies like the SEC, CFTC, and FinCEN imposing varied requirements. The SEC has categorized cryptocurrencies as securities, whereas the CFTC has categorized them as commodities. This complexity is compounded by state-level regulations, which further diversify the regulatory landscape​.

    Impact on Fintech Jobs

    Compliance and Legal Expertise: The growing complexity of crypto regulations increases the demand for compliance and legal professionals in fintech jobs. Crypto is decentralized but that does not mean that it has to be deregulated. The last decade or so has shown that crypto cannot remain fully deregularized because of scams. Which is why the need for compliance and legal expertise in crypto startups is growing, these roles involve ensuring that companies adhere to regulatory standards, conducting risk assessments, and developing anti-money laundering (AML) programs. Professionals with expertise in navigating these regulations are crucial for fintech firms to operate legally and effectively.

    Cybersecurity and Risk Management: Cybersecurity experts are needed to safeguard digital wallets, protect transaction data, and prevent unauthorized access. Additionally, risk management professionals play a pivotal role in identifying potential regulatory risks and implementing strategies to mitigate them​.

    Innovation and Development: Regardless of the regulatory challenges, there is significant scope for innovation within the fintech sector. Developers and engineers are tasked with creating compliant blockchain solutions and digital wallets that meet regulatory requirements while offering secure and efficient services. These roles are critical in adapting to new regulations without stifling technological advancements​.

    Market Analysts and Strategists: The fluctuating regulatory landscape influences cryptocurrency market dynamics, requiring market analysts to stay updated with regulatory changes and their implications. Strategists must develop business models that align with evolving regulations while exploring new opportunities for growth and investment​.

    Case Study: QuadrigaCX

    One notable example of a company facing significant issues due to a lack of expertise or internal controls in crypto regulations is QuadrigaCX. The Canadian cryptocurrency exchange collapsed in 2019 after the sudden death of its founder, Gerald Cotten. Cotten was the only person with access to the company’s cold wallets, leading to the loss of approximately $190 million in user funds. The lack of regulatory oversight and internal controls contributed to this failure, highlighting the critical need for compliance and risk management expertise in fintech jobs.

    Key Areas of Focus for Fintech Compliance

    1. Licensing and Registration: Fintech companies must comply with jurisdiction-specific licensing and registration requirements to operate legally and maintain operational standards​.
    2. Consumer Protection Laws: Regulatory frameworks like GDPR and CCPA enforce strict data protection and privacy measures, ensuring that fintech companies handle consumer data responsibly and transparently​.
    3. Anti-Money Laundering (AML) Compliance: Implementing robust AML programs is essential to prevent the misuse of financial services for illegal activities. This involves customer due diligence, transaction monitoring, and regular reporting to regulatory authorities​.
    4. Cybersecurity Measures: Fintech companies must implement strong cybersecurity protocols to protect sensitive data and maintain system integrity. Compliance with standards like PCI DSS and ISO/IEC 27001 is critical for safeguarding financial information​.
    5. Cross-Border Compliance: Expanding fintech operations internationally requires adherence to diverse regulatory frameworks across different jurisdictions. Fintech companies must stay updated on regulatory changes and collaborate with local regulators to ensure compliance​.

    Education and Skills for Fintech Jobs

    To land a role in fintech jobs, particularly those impacted by evolving cryptocurrency regulations, aspirants can consider the following areas of study:

    1. Finance and Economics: A strong foundation in finance and economics is essential for understanding market dynamics and financial regulations.
    2. Law and Compliance: Courses in financial law, regulatory compliance, and anti-money laundering practices are crucial for compliance and legal roles.
    3. Computer Science and Cybersecurity: Expertise in computer science, with a focus on cybersecurity, blockchain technology, and data protection, is vital for technical roles.
    4. Data Analysis and Statistics: Proficiency in data analysis helps in market analysis and strategy development, essential for adapting to regulatory changes.
    5. Business and Management: Knowledge in business management, particularly in the context of financial services, aids in navigating regulatory landscapes and driving innovation.

    Famous People in the Fintech and Cryptocurrency Sector

    Brian Armstrong: CEO and co-founder of Coinbase, one of the largest cryptocurrency exchanges in the world. Armstrong has been a vocal advocate for sensible regulation and mainstream adoption of cryptocurrencies.

    Changpeng Zhao (CZ): Founder and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume. Zhao has played a significant role in shaping the crypto trading landscape and navigating regulatory challenges globally.

    Caitlin Long: Founder and CEO of Avanti Financial Group, a digital asset bank. Long is known for her work in blockchain technology and her efforts in advancing crypto-friendly regulations.

    Christine Lagarde: President of the European Central Bank, Lagarde has been influential in shaping the EU’s approach to cryptocurrency regulation, particularly with initiatives like MiCA.

    Hester Peirce: A commissioner at the U.S. Securities and Exchange Commission (SEC), Peirce is often referred to as “Crypto Mom” for her supportive stance on cryptocurrencies and her advocacy for clearer regulatory frameworks.

    Future Outlook

    The future of cryptocurrency regulation is set for continued evolution. Regulators aim to balance the need for innovation with the imperative to protect consumers and maintain market integrity. This ongoing development will likely create new job roles focused on regulatory technology (RegTech), further integrating compliance into the fintech infrastructure.

    In conclusion, as cryptocurrency regulations evolve, fintech professionals must adapt to new roles that emphasize compliance, cybersecurity, innovation, and market analysis. This dynamic field offers numerous opportunities for those equipped to navigate the complex regulatory environment, ensuring that fintech companies can thrive while adhering to stringent regulatory standards.

    PostAd_coinrule_banner728x90

    Leave a Comment

    Your email address will not be published. Required fields are marked *

    *

    S64 and Invesco launch new European real estate fund for Private Wealth channel

    2024-09-17T08:00:00Z

    LONDON, Sept. 17, 2024 (GLOBE NEWSWIRE) -- S64, the global alternative investments fintech and solutions partner to the wealth management industry, and Invesco Asset Management Limited (Invesco), the US$1.7 trillion global investment management firm, have announced a partnership to broaden access to Invesco Real Estate’s European III Fund to the wealth management industry in Europe and Asia.

    The new European Real Estate III Feeder Fund (Europe III Feeder) invests in Invesco’s dedicated value-add and opportunistic strategy – Invesco Real Estate Europe III (Europe III). The Europe III Feeder follows Invesco’s focus on enabling High Net Worth investors to invest in institutional quality real estate targeting high returns through an innovative digital distribution platform built by S64.

    The Europe III Fund seeks to capitalise on an attractive entry point to fundamental, long-term value creation. The fund held its first close with EUR 400m, and is targeting up to EUR 1 billion of investor commitments, as it builds on Invesco Real Estate’s European value-add track record and the success of two previous funds. Overall, the value-add strategies have completed 39 investments across six sectors in 10 countries, with 21 realised investments delivering a 35% gross IRR and 1.7x gross EM.1 Consistent with Invesco’s ESG principles, more than 80% of the invested capital from the last two capital raises has been allocated to investments achieving high ESG certifications.”

    Simon Redman, Managing Director – Head of Wealth and DC at Invesco Real Estate commented: “We are delighted to be partnering with S64 to bring the Europe III Feeder to private wealth investors. In Europe, there is a disconnect between two cycles — the traditional real estate cycle linked to fundamentals, which remains on a sound footing, and the capital markets cycle which is driven by sharply higher interest rates and a lack of liquidity. We believe the resulting pricing correction has created a buying opportunity for investors able to see through the short-term noise.”

    Tarun Nagpal, Founder and CEO of S64, commented: “We are proud to be partnering with a global investment leader such as Invesco to support the delivery of the Invesco Real Estate Europe III to the wealth management industry in Europe and Asia. This partnership signals the latest step in the evolution of private markets as S64’s market-leading product manufacturing capabilities and cutting-edge technology platform is fused with Invesco’s asset management capabilities to optimize access for private wealth clients looking to invest in alternatives.”

    Notes to Editors

    About Invesco Ltd.

    Invesco Ltd. (Ticker NYSE: IVZ) is a global independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. With offices in more than 20 countries, our distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. Invesco managed USD 1.7 trillion in assets on behalf of clients worldwide as of 30 June 2024. For more information, visit www.invesco.com/corporate.

    About Invesco Real Estate

    Invesco Real Estate is a global leader in the real estate investment management business with EUR 82.5 billion in real estate assets under management, 613 employees and 21 regional offices across the U.S., Europe and Asia. Invesco Real Estate has a 40-year investment history and has been actively investing across the risk-return spectrum, from core to opportunistic, in equity and debt real estate strategies, and in direct and listed real estate for its c.500 institutional client relationships during this time. In Europe, Invesco Real Estate has eight offices in London, Munich, Milan, Madrid, Paris, Prague, Luxembourg and Warsaw, and 188 employees. It manages 208 assets across 14 European countries and with assets under management of EUR 15.4 billion. The team has a strong track record across all the commercial sectors, hotels and residential sectors. Source: Invesco Real Estate as at 31 December 2023.

    About S64

    S64 is a leading global alternatives and technology solutions business bridging the opportunity in private markets. It works with the world’s first-class asset managers and private banks across private equity, credit, real estate, infrastructure and impact to develop innovative solutions for private banks and wealth managers.

    S64 is the trusted partner to the world's leading GPs, asset managers, and private banks in EMEA and APAC who rely on S64's cutting-edge technology and unrivalled product manufacturing capabilities to unlock access to private markets. As the pioneering manufacturer of retail access solutions such as ELTIFs, LTAFs and evergreen semi-liquid funds, feeders and securitised solutions, S64 sits at the forefront of innovation in private markets for private wealth. 

    S64’s innovative technology platform offers the full lifecycle management of alternative assets — from structuring and distribution to financing, as well as secondary market capabilities meeting complex regulatory and cross border jurisdictional requirements across Europe and Asia.

    Its team draws on an award-winning legacy in fund and product solutions, digital innovation and international distribution, having pioneered alternative investment platforms for more than a decade.

    As the leading manufacturer of evergreen semi-liquid funds, ELTIFs and feeders, S64 is trusted to deliver products, solutions and market leading technology to the world’s leading GPs, asset managers, and private banks.

    Press contact:
    Invesco Real Estate
    Hugh Fasken
    Senior Director, Citigate Dewe Rogerson
    Tel.: +44 (0)20 7025 6435
    Email: hugh.fasken@citigatedewerogerson.com

    Press Contact:
    S64
    Michael Mpofu
    Director, Citigate Dewe Rogerson
    Tele: +44 (0)79 326 81947
    Email: Michael.mpofu@citigatedewerogerson.com

    Risk warnings
    For complete information on risks, refer to the legal documents. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Real estate investments can be illiquid and difficult to sell, and the fund may not be able to sell its assets when desired and at the intended price.
    The value of the investments is generally determined by an independent valuer’s opinion and may not be realizeable. The value of real estate loans may be significantly influenced by the value of the underlying real estate. Real estate investments are generally not listed on any market and need to be valued via the application of appropriate models (potentially applied by independent experts): this may lead to valuations which may not be reflected in transaction prices.
    Changes in market rents, net operating incomes, interest rates, FX rates, market trends and general economic conditions may result in fluctuations of the value of the assets, of the relevant portfolio and of the level of cash-flows generated by the fund's portfolio; fixed-rate loans with long maturities are more exposed to value fluctuations in reaction to interest rates' movements.
    The fund may use derivatives and borrowings, which may result in the fund being significantly leveraged and may result in large fluctuations in the value of the invested capital.
    Real estate investments and portfolios are exposed to counterparty risk, which is the risk that a counterparty is unable to deal with its obligations.
    Real estate loans are exposed to credit risk which is the risk of inability of the borrower to repay the interest and capital on the scheduled dates and at maturity. Loans or loans’ tranches with lower seniority (mezzanine, junior) bear a higher credit risk as those loans sit behind more senior ones in the repayment queue; the risk may be exacerbated in times of stress and in case of underperforming loans. Loans with high loan to value ratios (LTVs) or those secured on development assets are generally viewed as more risky than those with low LTVs or those secured on income-generating assets. Commercial mortgage lending is generally viewed as greater risk than residential mortgage lending since the repayment typically depends upon the successful operation of the underlying properties.
    Real estate investments can be exposed to sustainability-related regulatory requirements and trends that may negatively affect the value of investments which are not compliant. This may lead to a requirement for significant capital expenditure in order to meet mandated standards or characteristics.
    In addition, real estate investments can be also significantly exposed to negative economic effects stemming from climate change, natural disasters and the general investors' preference for assets with better sustainability features.
    Real estate investments are labour-intensive and require a significant amount of human/manual input and activities, and may therefore be exposed to several types of operational risk that may affect activities such as administration, operations, reporting obligations and many others.
    On top of typical real estate related risks, investments in real estate operating companies and in real estate platforms may embed governance and business risks that, if materialized, may negatively affect the value of the investments and the cash-flows generated.

    Important information about Invesco Real Estate Europe III
    This marketing communication is for trade press only. By accepting this document, you consent to communicate with us in English, unless you inform us otherwise.
    Data as of 1st July 2024 unless otherwise stated.

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Views and opinions are based on current market conditions and are subject to change.

    For more information on our funds and the relevant risks, please refer to the Offering Memorandum, the Annual or Interim Reports, and constituent documents (all available in English). These documents are available from your local Invesco office. The management company may terminate marketing arrangements.

    Any investment decision should take into account all the characteristics of the fund as described in the legal documents. For sustainability related aspects, please refer to www.invesco.com/emea/en/invesco-real-estate-management.html

    Marketing of the fund in the EEA is permitted to Professional Clients only. The fund is a dedicated Luxembourg closed-ended unregulated fund. It qualifies as an alternative investment fund (AIF) managed by Invesco Real Estate Management S.à r.l. as external alternative investment fund manager (AIFM).

    This document is issued in Austria, Denmark, Finland, Germany, Italy, The Netherlands, Spain, United Kingdom, Sweden by: Invesco Real Estate Management S.a.r.l., President Building, 37A Avenue JF Kennedy, L - 1855 Luxembourg, regulated by the Commission de Surveillance du Secteur Financier, Luxembourg.

    EMEA 3802870/2024

    1 27% net IRR (Internal Rate of Return) and 1.5x net EM (Equity Multiple). Source: Invesco Real Estate as of 31 March 2024. Past Performance does not predict future returns.


    GlobeNewsWire News

    Recent Comments