Executive Order on Banking Access, Paxos Settlement, and Russian Sanctions Gaps
Aug 15, 2025
Dive into the intriguing implications of the White House's executive order aimed at ensuring fair banking for all, which may inadvertently heighten risks of white-collar crime. Discover the groundbreaking CI-FIRST initiative that enhances collaboration between the IRS and financial entities to tackle financial crime more effectively. Unpack the significant $26.5 million settlement involving Paxos for regulatory failures linked to Binance, and explore corporate accountability with Liberty Mutual's bribery case, shedding light on enforcement challenges surrounding U.S. sanctions.
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insights INSIGHT
Executive Order Risks Weakening Risk Decisions
The White House executive order on 'Guaranteeing Fair Banking' pressures banks away from independent risk-based decisions.
John Byrne warns this could increase exposure to white-collar crime and systemic risk.
insights INSIGHT
Risk Models Are Inherently Subjective
Risk-scoring models always include subjective components and cannot be purely objective.
Elliot Berman cautions that insisting on 'objective' standards is flawed and may push banks away from active risk management.
volunteer_activism ADVICE
Join CI-FIRST For Better Information Sharing
Engage proactively in public-private partnerships like IRS CI's CI-FIRST to improve information sharing.
John Byrne highlights CI-FIRST as a model to optimize financial record requests and BSA data use.
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In this episode, John Byrne and Elliot Berman unpack a series of significant developments in banking, compliance, and enforcement.
They begin with the White House’s new executive order on “Guaranteeing Fair Banking for All Americans,” which aims to prevent what some call “debanking.” While positioned as a fairness measure, John and Elliot warn that it could weaken banks’ ability to make independent, risk-based decisions, potentially increasing white-collar crime exposure. They note concerns over the subjective nature of risk scoring and parallels to the 2008–2010 financial crisis.
Next, they spotlight the IRS-CI “CI-FIRST” program, a collaborative effort between financial institutions and the IRS’s Criminal Investigation division to improve information sharing and streamline financial record requests. The recent CI-FIRST Executive Forum in Washington is seen as a model for effective public-private partnerships in combating financial crime.
The discussion then turns to enforcement actions:
Paxos Trust Company will pay $26.5 million to New York regulators for failing to properly vet Binance and for systemic AML program weaknesses, alongside a $22 million investment in compliance upgrades.
The DOJ issued its first corporate FCPA action since resuming enforcement, with Liberty Mutual paying $4.7 million to resolve bribery allegations involving Indian state-owned banks.
Do Kwon, co-founder of Terraform Labs, pled guilty to wire fraud and conspiracy, tied to the $40 billion collapse of Terra USD and Luna, with a $19 million penalty and possible 12-year sentence.
They also cover a Senate minority report critical of the administration’s approach to Russian sanctions, arguing it undermines Ukraine’s leverage and lacks consistent enforcement. The FACT Coalition emphasizes the need for tools like the Corporate Transparency Act to bolster sanctions’ effectiveness.
On the policy front, they discuss delays and staffing cuts affecting the State Department’s annual human rights report and the pending trafficking in persons report—both key references for global human rights and anti-trafficking efforts.
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