Credit Suisse

CFTC commissioner appoints senior policy adviser experienced in digital asset regulation

Keaghan Ames worked at Credit Suisse for more than two years as vice president and head of U.S. regulatory policy, which included advising executives on digital assets regulation.

Caroline Pham, currently serving as a commissioner at the United States Commodity Futures Trading Commission, or CFTC, has announced a former head of U.S. regulatory policy at investment banking firm Credit Suisse Securities will be joining her staff.

In a Friday announcement, Pham said Keaghan Ames will be her counselor and senior policy adviser at the CFTC starting May 23. Ames worked at Credit Suisse for more than two years as vice president and head of U.S. regulatory policy, which included advising executives on digital assets regulation. He will be joining the CFTC from the Institute of International Bankers, where he has been the director of government affairs since July 2021.

Sworn in as a commissioner in April, Pham is one of five heads serving at the CFTC under chair Rostin Behnam — all of whom were appointed by United States President Joe Biden. Pham is the latest commissioner to join the CFTC following the confirmation of Christy Goldsmith Romero, Summer Mersinger and Kristin Johnson.

During Ames’ time at Credit Suisse, the firm’s digital asset arm tested end-to-end fund transactions using blockchain technology, later piloting a settlement system between itself, Paxos and Instinet. In February, the company was the victim of a massive data leak concerning its account holders, reportedly including sanctioned individuals and heads of state.

Related: CFTC commissioner appoints crypto-experienced CME Group director as chief counsel

Together with the Federal Reserve, Securities and Exchange Commission, Department of the Treasury, and Financial Crimes Enforcement Network, the CFTC handles policy around digital asset regulation and enforcement in the United States. Cointelegraph reported in March that the government agency was seeking a $365 million budget for the next fiscal year based, in part, on the risks around digital asset custodians.

Cointelegraph reached out to Keaghan Ames, but did not receive a response at the time of publication.

Bitcoin Suisse adopts decentralized Liquity as lending product

The Swiss firm will conduct all interactions with the Liquity smart contract on its clients’ behalf, but only a select few with over $500,000 on the platform will have access to the product.

Bitcoin Suisse has begun offering decentralized finance (DeFi) services to its clients with the addition of the Liquity protocol to its product lineup. It allows customers to post Ether (ETH) collateral in the protocol to mint and borrow the Liquity Dollar (LUSD) stablecoin.

In an announcement on April 20, Bitcoin Suisse said it will perform all smart contract interactions and system monitoring on its client’s behalf and allow the borrowed LUSD token to be exchanged into any fiat currency.

Bitcoin Suisse is a centralized crypto and financial services company founded in 2013 and based in Switzerland, offering services such as trading, custody, lending and staking of cryptocurrencies to mostly institutional investors.

Liquity is a DeFi borrowing protocol launched in April 2021 which allows users to post ETH collateral into its smart contract and borrow its native LUSD stablecoin at a 0% interest rate. Liquity currently has over $1.1 billion in total value locked into its contract.

CEO of Bitcoin Suisse Dirk Klee said the firm was proud to take a “significant step” toward offering decentralized solutions to its clients:

“DeFi offers significant improvements over traditional financial services by being more open, more transparent, and more competitive.”

Launched as a pilot stage, Bitcoin Suisse says it’s only available to a select and “very small number” of its clients with the borrowing amount set above $500,000.

DeFi is becoming a particular interest to both the crypto sector and traditional finance, with the current total value locked (TVL) across the ecosystem nearing $215 billion, according to DefiLlama. This is not far from its $254.8 billion all-time high on December 2, 2021.

Related: The many layers of crypto staking in the DeFi ecosystem

Centralized platforms are increasingly using DeFi infrastructure by either offering a central way to access decentralized services or by backing their products with DeFi smart contracts or liquidity.

In March, Binance added functionality for use of the decentralized exchange (DEX) PancakeSwap from within the Binance app, integrating the DEX onto its centralized platform. In the same month, it also launched an updated blockchain bridge, allowing assets to be bridged from any blockchain.

Australian-based finance app Blockearner backs its “Yield Account” product promising a 7% annual percentage yield (APY) with DeFi lending protocols Aave and Compound Finance, with users only having to deposit Australian Dollars which the app then stakes in DeFi on their behalf.

Bitcoin Suisse has long integrated crypto technology into its offerings. In November 2021, it was the first cryptocurrency payment processor in Switzerland to integrate the Bitcoin (BTC) Lightning Network in its effort to “promote the broader adoption of crypto technology.”

Credit Suisse data leak reveals decades of shady clients and activity

Swiss bank secrecy laws have protected Credit Suisse from having to disclose whether it was banking criminal activity, which is a far cry from the transparency blockchain technology offers.

Leaked data shows that until recently, Swiss bank Credit Suisse held accounts valued at more than $100 billion for sanctioned individuals and heads of state reportedly accused of money laundering.

The New York Times reported on Sunday that the data leak included more than 18,000 bank accounts. The data goes back to accounts that were open from the 1940s until into the 2010s, but not current operations.

Among the account holders holding “millions of dollars in Credit Suisse” were King Abdullah II of Jordan and Venezuela’s former vice-minister of energy, Nervis Villalobos.

King Abdullah II has been accused of misappropriating financial aid for his own personal benefit, while Villalobos pleaded guilty to money laundering in 2018. Other sanctioned individuals also held accounts at Credit Suisse, as the New York Times wrote:

“Other account holders included sons of a Pakistani intelligence chief who helped funnel billions of dollars from the United States and other countries to the (Mujahideen) in Afghanistan in the 1980s.”

Banteg, the lead developer at Yearn.finance, leading decentralized finance yield farming platform, tweeted on Sunday, “Credit Suisse AML happily hosted human traffickers, murderers, and corrupt officials.” Commenters took note of HSBC, another huge international bank that has paid hefty fines for aiding serious international criminals.

Although there are laws in place that prohibit Swiss banks from accepting deposits from known criminals, the country’s famous bank secrecy laws make it easy to evade, if they are enforced at all. This has seemingly made Switzerland an inviting place for criminals to do their international banking. The New York Times wrote:

“The leak shows that Credit Suisse opened accounts for and continued to serve not only the ultrawealthy but also people whose problematic backgrounds would have been obvious to anyone who ran their names through a search engine.”

The irony of a major traditional financial institution aiding high criminals was not lost on the cryptocurrency community, which has battled against accusations of abetting criminals for years. The $100 billion in deposits outlined by the data leak dwarfs the $25 billion estimated by Chainalysis to be held by criminal crypto whales as of 2021.

Related: Multichain recovers $2.6M stolen funds, to reimburse losses on condition

The bank has denied any wrongdoing, but the centralized clandestine way in which Credit Suisse has operated contrasts with fully transparent blockchain technology. Such transparency may also mean that investigators and law enforcement can keep tabs on individuals and governments that are trying to evade economic sanctions in real-time.