Legal Seminar, Denver, CO

Regulating Cash • The finality of a cash transaction removes the  natural incentive for the recipient of cash to  identify the counterparty.  (Trust the cash, not the  person). • AML laws are directed at changing that incentive  structure.   – Deputizing financial institutions and others to engage  in monitoring/reporting – Robust KYC regimes challenge anonymity – But note extent of reporting:  917K SARS for  depository institutions; 874K for money service  businesses (2017) Money Service Businesses • Non‐bank intermediaries also transmitting money.   – BSA/AML concerns. – Safety/Soundness concerns often address through state  regulation; variety of regulators creates challenges for  compliance – Civil and potential criminal penalties for noncompliance:   Caveat venditor. • IVTS (e.g. hawala, hundi) are a separate specie of MSB. – Trust‐based, often with cultural connection. – Will these continue to thrive in a modern world with  electronic alternatives?