Special Edition: 2025 Year in Review - July Through December

In this second part of our year-in-review series, Elliot Berman and John Byrne examine the major developments from July to December 2025. From Treasury’s delay of the investment advisor rule and the adoption of the GENIUS Act to the staggering $2 billion in crypto theft, the conversation covers critical shifts in financial crime prevention. They discuss staffing cuts at the State Department, EU fintech risk assessments, FATF’s new national risk assessment toolkit, and the humanitarian toll of sanctions. Other highlights include AMLA’s growing role in EU crypto oversight, AUSTRAC’s crackdown on casino compliance, and global enforcement trends. Plus, insights on OCC’s testimony signaling regulatory priorities for 2026 and FATF’s report on combating online child exploitation. Stay informed as we close out a turbulent year in compliance.

Special Edition: 2025 Year in Review - July Through December - Transcript

Elliot Berman: Hi John, how are you today?

John Byrne: I'm good, Elliot. Happy New Year. Happy New Year to you too. So the second half of 25, uh, obviously a lot of activity. We certainly covered it in our weekly conversations, but also in our podcasts and webinars. Globally as well as domestically. I think it's important to start off with in July, Treasury delayed again, no surprise to some of us that watch this for a living, the investment advisor rule from 2026 to 2028 and then reopened the comment process, uh, right away. As you would imagine groups like Transparency International and , other anti-corruption groups criticized the move as weakening US credibility, uh, especially again during the FATF mutual evaluation process.

But investment advisors have been on the table since the PATRIOT ACT in 2001. It's been amazing to see and obviously, I would argue heavy lobbying probably enabled this to get postponed. So something, to watch I would guess in the future, but definitely pushed way down the line.

Elliot Berman: Also during the summer, a midyear report on crypto crime was issued by Chainalysis. And they reported, and this was, uh, for the first half of 2025, that over $2 billion was stolen, had already been stolen at that point. And they, identified a couple of major events including North Korea's Bybit hack, which was resulted in the loss of $1.5 billion. So, a major issue.

And the GENIUS Act was adopted by the US Congress and signed by the president, which among other things created certain capabilities for issuers of stable coins which, uh, is still here at the, uh, very end of 2025 being discussed about how people are gonna implement that, uh, and what that really means, both for the economy, but equally importantly for financial crime prevention.

John Byrne: Yeah, so approved issuers under the statute can be subsidiaries of insured depository institutions, non-bank companies, or uninsured national banks approved by regulatory authorities, approved federal branches or state approved entities that are not banks or they're subsidiaries. And as you say they're still working on this.

I know that the traditional banking industry through my former association, the ABA and others, are very concerned that this is going to crowd out traditional banks from deposits based on this, we shall see. But as of our recording this, it's still, as you said, being debated.

Elliot Berman: Another thing that, uh, you and I talked about, uh, over the summer was the fact that there were significant staffing cuts to the US State Department, and there were concerns about that as it related to things you and I discussed, which anti-trafficking and terrorism, which are functions that State Department is actively involved in. And in fact, this year the Trafficking in Persons Report, which is a comprehensive annual report issued by the State Department, was issued several months later than normal. In part because the office that issues that the staff reductions were significant and their operating on, I think it's fair to say, a skeleton crew.

John Byrne: The counterterrorism office was actually closed and I was able to interview somebody who used to work in that office, had left a couple years ago, and he confirmed that many of his former colleagues are basically out on the street looking looking to use their expertise in other places. So that's, uh, that's a sad commentary on closing that office.

The Basel Institute, they do a lot of really good work, this year they released their 2024 findings on corruption, organized crime. That's obviously always important , to take a look at that. And then we talked about sanctions outside the US. Like for example, in the United Kingdom we did some conversations about what they perceive to be gaps in crypto asset sanctions enforcement. So that's important to look at.

And then we also talked about, it's something that we've worked a lot on in terms of podcasts and, and other closely watched areas, and that's the humanitarian toll that sanctions has when they are focused on governments, but in reality affect the population.

Uh, we talked a bit about corruption risks in Ukraine's reconstruction. That's still something we're dealing with today. Again, the de banking executive order. There also the rise of extortion scams linked to Southeast Asia. A lot of things going on. And then a lot of, um, policy debate continuing regarding the challenges to the Corporate Transparency Act. As we referenced in our first part of these, two conversations.

Elliot Berman: Yes. And uh, another thing that happened over the summer was the EU did a risk assessment and highlighted the FinTech vulnerabilities in the money laundering space. And as we know some FinTech companies have led with solutions and followed with, compliance. Many of our friends and colleagues have been employed by FinTechs as they've built out their compliance programs because that's where you can find the experience, people who grew up on the traditional financial services side. But the EU noted that this was something that FinTechs operating across Western Europe needed to continue to improve their compliance capability.

John Byrne: And FinCEN among other things issued several advisories, but one particularly focused on Chinese money laundering and then some financial trend analysis combined with that. That's obviously a priority that continues. The Chinese laundering networks. Also DOJ has been focusing on fraudulent IDs, so there's some cases regarding that.

Overseas a sharp rise in fraud according to United Kingdom. And there's what they're calling a landmark new United Kingdom law to address fraud. So we'll see, see how that works. FINTRAC'S been active in Canada, so they've done a number of things that we talk about on a regular basis. Reports, updates to their PEP policies, those sorts of things. So FINTRAC's been particularly, uh, active.

And then staying outside the US, the European Union issued what they call their 19th sanctions package against Russia in the fall. And so they're showing a strong commitment to deter Russia, uh, as they continue with the war with Ukraine.

Elliot Berman: In recognition of the importance of national risk assessments, FATF released a new national risk assessment toolkit to assist countries who are beginning to do national level risk assessments with a framework and a how to.

John Byrne: And again GAO the Government Accountability Office has done a number of relevant and important studies on whole aspects of, uh, of fraud and money laundering and other issues. And they did a report in, in the fall about the effectiveness of US sanctions. So again, a continuing debated point. Prior to this recording, I sat in on a conversation with people in the humanitarian world and they say, uh, that there are studies that show, and this is really amazing to me, that close to over 550,000 people die each year. Some reaction to sanctions globally. Which is phenomenal.

So the notion of the effectiveness of sanctions is important, not just for those obvious reasons there, but for the financial sector and others that have to comply with the sanctions, laws and regulations. So I think that's gonna be an ongoing conversation in 2026. I think I can predict.

Elliot Berman: Yeah, there was also a continued debate over extending AML obligation. This is in the US, to law practices. That is already standard in the UK and the EU, that law firms and therefore their employees are under AML obligations. The US that continues to be, a discussion rather than a requirement.

John Byrne: And it certainly seems like the, uh, Europeans are more concerned in terms of the law enforcement aspects of, uh, cryptocurrency than we seem to be from a policy perspective. And, um, AMLA the law or the new organization in the EU, we reported on a growing role they have in European Union wide crypto supervision. So that was also something that we will continue to watch in 2026.

Elliot Berman: And, uh, we'll watch AMLA the organization continue to develop as they, uh, build out the staff and, uh, work with the member state FIUs to move to better coordination, which is one of the purposes of the organization. And as they implement the law, which happens to have the same acronym.

John Byrne: You know, similar to talking about FINTRAC and how active they've been. In Australia AUSTRAC, actually the very first financial intelligence unit created in the world, issued a number of warnings and policy reports and others, uh, throughout 2025.

And , it's often pretty important to see what Australia is doing in that part of the world. So AUSTRAC is a really good source for those related AML/CFT issues.

Elliot Berman: And throughout the year, AUSTRAC has been very focused on potential money laundering risks of at casinos. They have a very robust gaming industry in Australia, and AUSTRAC has issued a number of penalties and other things as they have found participants in that market to be wanting in terms of their compliance.

John Byrne: Obviously toward the end of any year, there's always reports, some are reports of what's occurred in that particular calendar year. Others things that have occurred in prior years. So we saw in the fall the releasing of a number of, uh, global financial, uh, crime trends. We saw the Global Organized Crime Index that was issued. FATF of course, as we've talked about, they had number of reports throughout the year and there was an October plenary.

So that was, uh, important. In terms of enforcement actions, fines and penalties in the US and other places. That's also a good place to look to sort of map out where do you stand in your institution, your clients, in terms of the issues in particular enforcement actions?

Not just US enforcement actions, but global ones, which I think actually Elliot, there's probably been more record fines outside the US than in the US without looking closely. That would certainly be my, my thought on the 2025.

Elliot Berman: Yes. And as we discussed just a little earlier and have discussed throughout the year with the GENIUS Act and other things related to crypto and stable coins in the US, late this year, the Bank of England has issued proposed restrictions on the use of stable coins in terms of ownership and other purposes. So again, interesting divergence between other parts of the global economy and the current direction in the US.

The other thing, and this is the first time we're mentioning it, FATF issued a report on combating online child exploitation. And we have seen other organizations, both law enforcement, I know FINTRAC in Canada issued a bulletin about that and, uh, other organizations including those in the US.

Online child exploitation, in a variety of forms is catching everyone's attention and appropriately. And the, uh, goal is to inform folks in the compliance community about red flags and, uh, those kinds of things to try to stem, uh, that terrible activity.

John Byrne: We mentioned the OCC. The Comptroller testified late 2025. And I would urge everybody, this is on the House side, to take a look at that testimony 'cause it gives you a very clear indication of where we think the OCC is going to be going forward. And I'll just reference a couple items from the written testimony.

One is the following, I'm quoting here, the OCC's support functions have degraded over the last four years, posing a risk to our ability to execute our statutory mission. Outward signs of this decline include the hiring of a fraudulent quote, chief financial technology officer, unquote, in 2022, and an email data breach that took nearly two years to identify affecting our credibility. Not sure what the fraudulent referencing there the missing of the email data breach, I suppose.

Supervision according to, uh, the Comptroller must be clear, credible, and consequential. We are cutting away procedural clutter and returning to risk-based supervision rooted in law with an emphasis on examiner judgment. Not arbitrary checklists. So if you're, um, interested in where we think we're gonna be in 2026, I think taking a look at this, uh, testimony, we'll, uh, get you started.

Elliot Berman: John, before we, uh, finish up, I just want to remind people that we'll be doing our January. webinar on human trafficking. And that'll stream on January 22nd. You can register currently at our website, aml rightsource.com for that session, and I urge you to register and watch that panel. As always, we'll have great experts to provide excellent insights.

John Byrne: As we sign off here Happy New Year to everybody. And as somebody once said years ago as we think about the challenges of 2026, keep the faith, everybody. We wanna make sure AML stays with a strong infrastructure and that we continue to do every day what we know makes a difference to society and community. So hang in there, everybody.

Elliot Berman: Agreed. John, you have a, uh, great rest of the week and I will talk to you next week.

John Byrne: Take care.

Elliot Berman: You too. Bye-bye.