Interview: Blockchains & the Bank Secrecy Act, with Rebecca Rettig, Omid Malekan and Michael Mosier

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Oct 26, 2026

Guest

Michael Mosier

Rebecca Rettig, Jito Labs’ chief legal officer; Omid Malekan, Columbia Business School professor and money commentator; and Michael Mosier, former FinCEN and OFAC official, explore whether banks can use public blockchains without violating the Bank Secrecy Act. They tackle sanctioned validators, OFAC enforcement, credible neutrality, application-layer compliance, privacy, and a nine-part framework for institutional blockchain adoption.

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INSIGHT

Open Networks Provide Institutional Protections

Properly designed permissionless systems offer final settlement, lower counterparty risk, resilience, and open participation.
Their protections depend on open consensus rather than merely calling a system blockchain.

INSIGHT

Credible Neutrality Makes Blockchains Useful

Credible neutrality means users can trust that open protocol rules will treat everyone equally and remain predictable.
Restricting a blockchain to gain partial benefits can produce the worst features of both centralized and decentralized systems.

INSIGHT

The BSA Requires Reasonableness Not Perfection

The BSA evolved from recordkeeping rules into a risk-based framework covering suspicious activity, customer identification, and crypto-related value.
It requires reasonable risk control, not perfect elimination of every illicit transaction.

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Can traditional financial institutions use permissionless blockchains without being offside of the Bank Secrecy Act?

What happens if a bank unknowingly pays a fee to a sanctioned validator?

By the end of this episode, you'll understand the history of the Bank Secrecy Act, how OFAC actually enforces sanctions and a new paper's nine-part framework for how banks can use public blockchains and stay compliant.

You'll hear from the paper's three co-authors:

Rebecca Rettig (Chief Operating Officer and Chief Legal Officer of Jito Labs, of counsel at Arktouros)
Omid Malekan (adjunct professor at Columbia Business School) and
Michael Mosier (co-founder of Arktouros and former acting director of FinCEN).

This episode is presented by Altitude, visit https://altitude.xyz/law to learn more about their global payments platform.

Timestamps:

0:00 Intro

3:24 Problems they see

5:39 The router principle

7:13 What permissionless systems get right

11:28 Lessons from the open internet

14:23 Credible neutrality

19:20 A brief history of the BSA

23:55 What OFAC enforcement looks for

26:16 Treasury, Iran and open networks

28:29 The SEC's innovation exemption

34:03 Compliance belongs at the app layer

37:04 "The government will never allow it"

39:39 The paper's nine-part framework

44:12 Network layer vs. transaction layer

46:28 The $50,000 canoe

48:02 Safety, soundness and final settlement

50:29 Why this matters for national security

51:27 Privacy

58:07 What this means for DeFi

Thank you to Cahill Gordon & Reindel for sponsoring this podcast.

Thank you as well to the Solana Policy Institute, the Hyperliquid Policy Center and the Decentralization Research Center for supporting the podcast.

The full paper is here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7343938.

Disclaimer: This podcast is for informational and educational purposes only and does not constitute legal or investment advice. Views expressed by guests are their own and do not necessarily reflect those of their employers. Listening to this podcast does not create an attorney-client relationship.