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Financial Institutes Seeking A Way To Track Their Employees Cryptos Transactions

Feb 07, 2018 Posted /  3612 Views

Financial Institutes Seeking A Way To Track Their Employees Cryptos Transactions

Until now, major financial institutes showed wide interest in Cryptocurrencies and technology behind them, Blockchain as it was a good option for other types of transactions as well. But with the downstream prices, investors are showing resentment and banks like  Goldman Sachs Group Inc and Morgan Stanley are looking for a way to clear their previous trades.

In an interview with Reuters a partner at law firm Eversheds Sutherland, Gregory Kaufman stated that they are getting requests for compliance policies from various companies to avoid front running. The companies are worried because of the pseudo-anonymous feature of a virtual token where an employee might think that he can conduct inside-trading and will not be caught.

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As per the reports, firms keep an eye on employees holdings through their personal accounts reports received from brokers. Employees get clearance before investing in any risky asset but with the mentioned feature no such record would be traceable as data would be encrypted.

Until now, no such incident of insider trading has come to limelight but sudden price surge on the announcement of Financial Institutes shows the risks of conflicts. In May 2017, when JP Morgan Chase and Co. claimed to use the Blockchain Technology the prices of Zcash crypto surged by 129% on the very same day. The same incident happened when large financial firms initiated a partnership with projects related to ethereum and ripple.

Banks such as Citigroup Inc and Morgan Stanley also wants its employees to follow the code of conduct and are still exploring the ways to examine their investments in the virtual economy.

Financial Institutes are not able to set their regulations as they have not received any from global regulators. On the one hand U.S. UFTC considers it as a commodity and on the other hand, U.S. SEC considers it as a security that too without any specification.

a partner at Lowenstein Sandler LLP, Ben Kozinn proposed that organizations can ban its employees from trading in personal cryptocurrency. The global regulators would come up with tough regulations in the response of explosive rise and fall in the digital economy.

As per the sources, the staff memo of Switzerland’s UBS Group AG acknowledged virtual tokens as securities. Thus, the staff is not asked to disclose their savings and get clearance. While Nordea Bank AB will ban trading in cryptocurrencies for its staff members by the end of February.

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Tags: feature of cryptocurrency trading Cryptos Transactions Cryptocurrencies

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