Investigative Due Diligence and Why It Matters?

Ep #57 with Eelee Lua, xcubeEelee Lua is chief of staff and a director at xcube.co – a Singapore-based corporate venture studio. A seasoned business leader in the technology space, specializing in risk mitigation and strategic partnerships. Having entered the risk and compliance field 13 years ago, having previously held roles at AsiaVerify and the RISQ Group.Eelee holds a board director accreditation from the Singapore Institute of Directors, and actively contributes to industry communities such as the Singapore FinTech Association and Women In Alliances.Recently, she penned an article entitled “Circular Financial Identity – The Missing Piece for Financial Inclusion,” which forms the basis for this episode’s discussion. In this instalment of Regulatory Ramblings, Eelee talks to host Ajay Shamdasani about her piece and how financial inclusion remains a critical global issue, with approximately 1.4 billion people still lacking access to formal financial services. She also shared a little about Defy, an xcube company on a mission to address financial inclusion. Her observation that traditional financial systems often exclude marginalized populations, such as low-income individuals, women, rural communities, and refugees was what compelled her to write the article. Financial exclusion not only limits economic opportunities but also perpetuates poverty.Yet, all is not lost and Eelee believes technology may yet deliver true financial inclusion. A promising solution to bridge this gap is Circular Financial Identity (CFI), she says, “which has the potential to transform financial inclusion efforts worldwide.” The key, she says is understanding CFI because “unlike traditional digital identities that rely on static information and centralized databases, CFI employs a dynamic, decentralized, and interoperable system” – thereby enabling “under-documented individuals, including refugees, to gradually build their financial identity by capturing their digital financial footprint across various domains such as earning, spending, borrowing, saving, investing, and lending.”The circularity of data, particularly, the continuous accumulation and reuse of financial data create a comprehensive, robust, and evolving picture of their financial behaviour and capabilities, enabling access to a broader range of financial services, Eelee says.(For more details about CFI, visit: www.hkufintech.com/regulatoryramblings)Eelee also shares a little about her own background, upbringing, education and what launched her on a path to a compliance career. She also describes what xcube does as well as her own “moment of epiphany” when she realized that the world of cryptocurrencies and digital assets were something important that she needed to pay attention to in the years to come.Looking ahead, while she thinks Web3 will have a marked impact on banking Southeast Asia and the Middle East, she cautions that many of the world’s financial institutions have yet to consider the interoperability and integration issues of how to use such technologies in the current world.A resolute believer in the power of targeted use of technology to aid the perennial global cause of financial inclusion and bring about a more egalitarian world with a more level playing field, the conversation concludes with her reflections on a decade plus in the risk and compliance field, and her greatest lessons, challenges and regrets in that time.HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #56 with Chengyi Ong (Chainalysis)Chengyi Ong leads public policy in the Asia-Pacific region for Chainalysis out of from the firm’s regional headquarters in Singapore. Drawing on Chainalysis’ blockchain data analytics platform, she works with public and private sector stakeholders to distil developments in digital asset markets, and their intersections with global and regional regulatory trends. Prior to joining Chainalysis, Chengyi spent 13 years at the Monetary Authority of Singapore, holding roles in financial regulation and supervision, financial sector development, and central banking. She also served as the Advisor to the Executive Director for Southeast Asia at the International Monetary Fund. In this episode of Regulatory Ramblings, she talks to host Ajay Shamdasani about the intersection of money laundering, financial crime and cryptocurrencies. The conversation begins with Chengyi describing her upbringing, formative years, choice of career path and her time as a regulator at the MAS. She then goes on to talk about what Chainalysis does, its market position, and her interest in the digital asset sector. She shares her views on the rising levels of both crypto native and non-crypto native money laundering, why such trends are growing and the types of crimes emanating from Asia – making reference to key findings from Chainalysis’ recent report on the matter, including the 2024 Crypto Crime Report and the 2024 Crypto Money Laundering Report. Chengyi also discusses her thoughts on stablecoins being used for money laundering, what her firm’s report says about the destination of illicit funds and what the best ways are to prevent crypto native money laundering – especially in the Asia-Pacific. To that end, she is candid about what regional regulators should do to tackle this issue, noting that more needs to be done. What ensues is a deeper chat about what the role of regulators in ferreting out financial crime should be vis a vis cryptocurrency exchanges and financial institutions – the latter of which are financial gatekeepers in their own right. The conversation concludes with Chengyi reflecting on the arc of her career and how AML regulations have evolved in APAC over the years. She stresses that in an age of aggressive enforcement actions, sanctions and not insubstantial fines, it will be imperative for organizations to verify the entities that are transacting and engaging with. She offers some suggestions as to how they may do so. HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep 55 with Angela Ang, Senior Policy Advisor, TRM LabsAngela Ang is the Senior Policy Advisor at TRM Labs, a global blockchain intelligence company, and a former regulator at the Monetary Authority of Singapore (MAS). Having spent over a decade at MAS, she held the role of Deputy Director in charge of licensing payments and crypto service providers. Angela has also been recognized as a LinkedIn Top Voice for Finance in Asia for her leadership in digital asset developments.In this episode, Angela reflects on her journey from growing up in Singapore to her education at INSEAD, and her early career at MAS, where she helped promote Singapore as an international financial hub. As a former regulator, she highlights the unique experience of policymaking at a high level and emphasizes that despite the intellectual rigor, regulators are still people, too.The discussion shifts to TRM Labs and its role in blockchain intelligence. Angela explains that “Blockchain analytics is like Google Maps for blockchain,” helping clients understand blockchain data to combat fraud and financial crime. While blockchain’s ledger is immutable, clients often struggle to interpret it, and TRM adds context to provide a clearer picture.Angela draws parallels between her work at MAS and TRM Labs, highlighting the compliance-centric and mission-driven nature of both organizations. She notes that TRM Labs’ nimbleness and entrepreneurial spirit, combined with its focus on integrity, attract former public sector staff.Angela recalls her first exposure to cryptocurrencies and blockchain in 2015 while researching for MAS. She emphasizes the balance between blockchain’s promise and the risks associated with crypto speculation, echoing Singapore’s prudent regulatory stance on innovation vs. speculation. She also touches on Asia’s regulatory landscape, noting how the region leads in regulatory clarity. Singapore and Japan pioneered crypto regulation, recognizing the importance of creating robust rules to protect investors. She cites examples like Singapore’s crypto custody rules and Hong Kong’s virtual asset service provider licensing regime. Angela discusses the global trend toward tighter crypto regulation, with an 80% shift toward stricter controls and consumer protection. She points out that regulation is crucial for preventing illicit activity, but it requires sufficient enforcement and skilled people to ensure compliance. The conversation then covers the talent shortage in crypto compliance. While older compliance principles still apply, the unique challenges of blockchain technology require specialized expertise. Angela also discusses the importance of SupTech and RegTech, noting TRM Labs’ role in real-time blockchain monitoring tools for both compliance professionals and regulators.Despite concerns about crypto-related crime, Angela highlights that only 0.63% of global crypto activity involves crime, a figure comparable to traditional finance. She notes that proper licensing and risk controls reduce crime in regulated jurisdictions and emphasizes that most exchanges now have some level of compliance.Looking forward, Angela identifies market misconduct as an emerging issue in digital finance, with global regulatory bodies like IOSCO prioritizing it in their work.HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #54 With David Caruso, Dominion Advisory Group In this episode of Regulatory Ramblings, David Caruso, a former U.S. Secret Service agent turned global financial crime fighter, shares insights from his 30-year journey in AML and financial crime compliance. With an impressive career, including time as chief compliance officer at Riggs Bank, David recounts his pivotal role in uncovering corruption scandals involving Equatorial Guinea and former Chilean dictator Augusto Pinochet. These investigations sparked significant U.S. regulatory and legal actions, influencing AML enforcement on a global scale. David reflects on the evolution of financial crime compliance, pointing to key regulations like the Bank Secrecy Act, USA PATRIOT Act, and FATCA. He critiques how the increasingly regulatory-driven focus has distracted AML teams from their primary mission. He also shares his concerns about international policy-setting bodies, such as the Financial Action Task Force (FATF), questioning whether new rules are truly effective in preventing financial crime or unintentionally stifling economic growth. The discussion wraps up with David’s views on the limited success of sanctions against Russia, the potential of AI in AML/KYC compliance, and his policy recommendations moving forward. David Caruso is the founder and managing director of Dominion Advisory Group, helping banks across the U.S., Europe, and Asia navigate financial crime risk and compliance. With a background as a U.S. Secret Service agent and a degree from George Washington University, he has been at the forefront of shaping financial crime compliance since 1996, advising global institutions and building AML programs at major banks. For more details about the contents of this podcast, please visit: www.hkufintech.com/regulatoryramblingsHKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #53 with Kapil Dhiman,  Co-Founder & CEO of QuraniumMumbai-based Kapil Dhiman is the co-founder and CEO of Quranium. An entrepreneur to his core with a creative and artistic side – coupled passion for problem solving – Kapil is a seasoned leader with 12 years of diverse international consulting experience in dealing with enterprises, startups and funds. He is also a former Web 3.0 leader at PwC India and an award-winning CEO who crafted the Metaverse Startup of the Year 2023 from scratch. A distinguished global speaker and author, Kapil has helped over 20 startups in the Web3 ecosystem with their go-to-market (GTM) and product strategies. In this episode of Regulatory Ramblings, Kapil chats with host Ajay Shamdasani on how advances in quantum computing can compromise Blockchain transactional security and anonymity. Much has been said about quantum computing and how it is going to revolutionize the world – and part of that is reflected in the new Cold War between the US and China, with Beijing constantly eager to tout its advances in the field and with the American and European mainstream press clamoring about how the collective West is falling behind – in a manner almost reminiscent of the US response to the USSR’s 1957 Sputnik launch. Some, such as Kapil, contend that the security of cryptocurrency transactions can be breached by quantum computing, notwithstanding the much touted ‘National Security Agency (NSA)-level encryption’ that pollyannish virtual asset advocates say exists when using a Blockchain. Kapil shares a little bit about his background and the challenges of growing up in a military family with a father he was very temperamentally different from. Recounting the challenges of starting his own firm – and the joys and hurts of following an entrepreneurial path – and what he envisages for Quranium.The discussion proceeds to define what exactly quantum computing is, and if it should be regulated across the board or whether each industry availing itself of such computers should devise their own rules. Kapil concludes it something each country will have to decide for itself – in much the same way artificial intelligence is being regulated globally. Kapil also shares his thoughts on the notion that AI will come alive once quantum computing reaches a mature state. He addresses the issues of whether there is a mismatch between computing power and the ability to use AI to its fullest potential. A lingering concern is that AI in its current state is not ‘real AI’ and that the purest version of AI will require more advanced quantum computing. The conversation concludes with Kapil remarking on what Web 3.0 means on a practical level, as well as dispelling the cliché that creative and artistic types such as himself are not practical and business savvy, stating that such things can be learned if one is diligent and motivated enough. HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #52 with Oonagh van den Berg (RAW Compliance)Oonagh van den Berg, a seasoned international compliance professional, is the founder of RAW Compliance, a consultancy and training firm. With a legal background and two decades of experience in London, Hong Kong, and Singapore, Oonagh has become a respected figure in the compliance industry. Her upbringing in Northern Ireland during the violent era of "The Troubles" in the 1980s shaped her resilience and determination, leading her to a career as a lawyer, compliance officer, recruiter, consultant, and educator. In this episode of Regulatory Ramblings, Oonagh discusses with Ajay Shamdasani the critical role of artificial intelligence (AI) in combating financial scams, deepfakes, and sextortion. These issues have become increasingly prevalent, especially in the dark corners of Web3. Oonagh's perspective is deeply personal, as her 13-year-old daughter and friends recently fell victim to blackmail after sharing innocent photos on Snapchat. This experience has driven her to raise awareness and produce educational videos through RAW Compliance, targeting pre-teens, teenagers, and young adults to prevent similar incidents. A Europol poll highlights the growing use of AI by cybercriminals to commit complex and dangerous crimes. Malicious large language models (LLMs) are being utilized to craft scripts, phishing emails, and fraud advertisements, as well as to groom victims across language barriers. The rise of AI-altered and fully artificial child sexual abuse materials, which are increasingly realistic, has led to devastating consequences, including blackmail and suicides. Oonagh also touches on her firm’s groundbreaking collaboration with Nick Leeson, the infamous former Barrings trader, to support victims of financial scams and assist in asset recovery. Together, they aim to provide the necessary help and guidance for victims to reclaim their financial futures.  She also criticizes banks for their insufficient efforts in helping scam victims, citing outdated technology and inadequate fraud detection systems. The scale of financial crime is alarming, with over 3.5 million people in the UK affected annually, leading to losses exceeding £1.2 billion. The problem is similarly severe across Europe and the US, with losses reaching billions of euros and dollars, respectively. The conversation explores how financial institutions can navigate evolving regulations, monitor for child sexual abuse materials (CSAM), and investigate human trafficking within both traditional and decentralized financial systems. Oonagh emphasizes the challenges of global technology use in combating these crimes and provides estimates on the total value of suspected CSAM transactions using fiat versus cryptocurrency. Oonagh concludes by highlighting the financial sector’s failure to take responsibility for anti-money laundering, human trafficking, and financial scams. She stresses the importance of understanding suspicious red flags and typologies that can aid in investigations, a crucial takeaway for both traditional financial crime compliance professionals and blockchain investigators. HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #51 with Michael Borrelli (AI & Partners) and Anandaday Misshra (AMLEGALS)In this episode, host Ajay Shamdasani discusses the EU AI Act with Michael Borrelli and Anandaday Misshra. The EU AI Act, the world's first comprehensive AI law, went into effect on August 1, 2024. The guests explore its global impact, particularly on compliance officers, in-house counsel, and businesses both within and beyond the EU.Michael Borrelli is a Director at AI & Partners, leveraging over a decade of experience in financial services, compliance, and technology. He is passionate about responsible AI and serves in various advisory roles, contributing to AI and FinTech knowledge and best practices.Anandaday Misshra is the founder and managing partner of AMLEGALS, a multidisciplinary law firm in India. With over 27 years of legal experience, he specializes in arbitration, data protection, taxation, and commercial litigation. Anand also discusses the implications of AI for India's information technology sector, highlighting the challenges and opportunities that AI regulations like the EU AI Act might present for Indian businesses and legal practitioners.The episode also touches on concerns about the EU AI Act's potential extraterritorial reach, similar to the US Foreign Account Tax Compliance Act (FATCA). The conversation concludes with thoughts on whether the US might introduce its own AI regulations and the broader impact on India's growing tech industry.For more details, please visit: www.hkufintech.com/regulatoryramblingsHKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #50 with Syed Musheer Ahmed, Finstep Asia Syed Musheer Ahmed has two decades of extensive experience in the realms of capital markets, fintech and virtual assets – including a decade as a global markets’ trader, prior to coming to Hong Kong to attain his MBA from the University of Hong Kong and London Business School’s joint program. Since 2016, Musheer has contributed extensively to building the region’s fintech and virtual asset ecosystem, particularly as the co-founder and the inaugural general manager of the Fintech Association of Hong Kong. For the last five years, he has been the managing director of FinStep Asia – a firm which he founded to provide Venture building and empower cross-border bridges across Asia . In the interim, from October 2022 to January 2024, he served as a financial markets risk assurance lead as part of the foundational team of the Virtual Assets Regulatory Authority (VARA) in Dubai. In this episode of Regulatory Ramblings, Musheer chats with host Ajay Shamdasani about his background, growing up in India’s information technology hub, Bangalore, his initial training as an engineer and his stint as a regulator in the Mideast’s Manhattan. As the discussion progresses, Musheer reaffirms his faith in Hong Kong as a place for FinTech and crypto entrepreneurs, discussing what it is as about the city and the field that continues to attract and marvel him. He also stresses that in the evolution of FinTech, the field has long since passed the nascent stage and is no longer all that new and glamorous since the advent of iPhone in 2007 and Satoshi Nakamoto’s paper on Blockchain first released in in 2009. Yet, he acknowledges that technological innovation continues, as he shares his thoughts on the regulatory approaches taken across Asia by mainland China, India, Singapore and Hong Kong – and the similarities and differences between some of the major jurisdictions. While virtual assets which have evolved in some parts of the world, in others, they are still somewhat of a grey-zone. Musheer also comments on the prospects for cross-border crypto regulation in the Asia-Pacific or even internationally evolving to the level of harmonized rules, or even mutual recognition or common passporting – as was discussed a decade ago for the investment funds sector. He also shares his views on how the choice between stablecoins and central bank digital currencies (CBDCs) is not binary. Musheer emphasizes it is not an either-or choice because both fulfil different purposes. The conversation concludes with his assessment on the potential for Hong Kong and mainland China to collaborate with the FinTech and virtual asset hubs of the Middle East such as Dubai. HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep #49 with Dr. Andrew Mazen Dahdal, College of Law, Qatar UniversityDr. Andrew Mazen Dahdal is an associate professor at the College of Law at Qatar University in Doha. He received his Ph.D. from the University of New South Wales, where he received an outstanding achievement award in 2014 for his dissertation on the necessity of historical analysis in constitutional interpretation. Andrew has also taught constitutional and commercial law within Australia and Europe in both fulltime and adjunct roles. Writing on law, technology and global legal frameworks, Andrew is now focused on exploring the intersections between private and public law specifically by exploring the technocratic connections between constitutional and commercial legal frameworks. This episode of Regulatory Ramblings features a discussion on his upcoming book entitled Digital Currencies and Public Law: History, Constitutionalism and the Revolutionary Nature of Money. In it he advocates for deeper engagement by public lawyers in digital currency developments which threaten dramatic changes in the relationship between individuals and government authorities. As Andrew shares with our host, Ajay Shamdasani, no modern issue is more widely acknowledged and less understood than that of digital currencies. The voice of constitutional scholars, however, is crucially missing from prevailing digital money conversation. For example, private law scholars are grappling with the legal questions raised by digital currency models in property and contract. Alternatively, public law scholars have yet to appreciate the significance of the moment.Andrew argues that the challenge of understanding the technical dimensions of digital money innovations has obscured the potential constitutional revolution that digital currencies represent. His book starts with the premise that ‘money’ is best thought of as a constitutional phenomenon. When seen in that light, it becomes clear that changes in the nature of money represent changes in political and constitutional arrangements.The discussion elaborates on how and why that is so by examining episodes in history where the nature of money was linked to renewed constitutional settlements. The book distills a core set of principles linking aspects of monetary innovation such as technical control of the money supply to constitutional positions such as executive fiscal accountability. From such principles, a conceptual framework is proposed that translates the specific attributes of digital currency proposals into the language of constitutional dynamics.Andrew also recounts what it was about digital currencies that initially piqued his curiosity as a constitutional scholar and ultimately, what compelled him to write the book. He also shares his thoughts on what he feels the book adds to an already crowded market place on the subject matter.He concludes by saying that cryptocurrencies and virtual assets herald an opportunity for wholesale constitutional reform the world has yet to see. Andrew notes that certainly when it arrived on the scene and its most ardent advocates were anti-statist, anarcho-libertarians – and even to some extent today – the rise of Bitcoin and digital assets writ large can be scene as a political movement in search of an ideology. Looking back on the development of money, Andrew said, every fiat currency has been a form of money, albeit stripped of its intrinsic value. Moving forward, he said, there was no way to have a robust conversation about money and digital change without interrogating competing monetary forms.HKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.

Ep 48 with Dr. Mariola Marzouk (Vortex Risk Ltd.)In this episode of Regulatory Ramblings,  Dr. Mariola Marzouk, an AML expert who has co-founded Vortex Risk Ltd., shares her insights on trade-based money laundering (TBML), and her philosophy on financial crime prevention. She talks about her approach to leveraging RegTech, the importance of human judgment in AML, and her critique of the global financial regulatory landscape. She also discusses regulatory compliance technologies for their failure to effectively combat money laundering and argues that despite claims of innovation and disruption, these technologies focus more on regulatory adherence than understanding the complexities of financial crime. Marzouk contends that while these tools may expedite compliance processes, they do little to reduce criminal activities or address broader social injustices like poverty and sanctions evasion. She suggests a disconnect between industry claims and their actual impact on financial crime prevention.Read more about this podcast and Dr. Mariola Marzouk at www.hkufintech.com/regulatoryramblingsHKU FinTech is the leading fintech research and education in Asia. Learn more at www.hkufintech.com.