Cryptocurrency: Compliance Officers Concern as Cryptocurrency Trades Become Mainstream

More and more major financial institutions are getting more involved with cryptocurrency trading and so, they are trying to find a way to handle conflicts which may arise when employees trade virtual coins in their personal accounts.

Until recently, brokerages, banks and exchanges had avoided the cryptocurrency craze even though they had invested in blockchain, hoping that they could use the technology for different types of transactions.

However, due to soaring prices of the digital coins, it has provoked investor interest with banks including Morgan Stanley and Goldman Sachs Group Inc who have been searching how to clear trades whereas derivatives exchanges CME Group Inc and CBOE Global Markets Inc have recently launched bitcoin futures.

Employees are normally needed to get clearance before trading in any securities which could present a conflict of interest. The firms monitor employees’ holdings by getting reports from brokers on their personal accounts. However, those policies would be difficult to put in place with cryptocurrencies as they are digital tokens which use encryption techniques in order to secure transactions.