For Chicago native Joe Ciccolo, he has always loved the “thrill of the chase” to find the telltale signs of illicit finance in a sea of swirling data. But equal in measure to the rush of catching the “bad guys” is helping other people do the same – a rare skillset in demand in his current field: crypto compliance.
Not surprisingly, for someone so familiar with weighing and calibrating things like anti-money laundering (AML) and fraud risks at brick-and-mortar financial institutions (FIs), Ciccolo did something most banks would cringe at: He took a huge risk himself on creating a business to teach financial crime compliance for the rollicking virtual currency sector – a move many advised him against.
But as many great thinkers and doers before him, Ciccolo’s leap of faith into the unknown has given him more than just a sense of accomplishment – it has sated a desire to challenge himself in a field where all the rules were not already written. He also recently moved to California to further that understanding, ensuring propinquity to the crypto tech hubs aplenty there.
Now, he gets to be part of history in a new virtual currency sector brimming with innovation, opportunity and, yes, risk, where he can learn new things and create strategies and tactics to counter criminals, impress regulators and yield powerful, precise and timely intelligence to law enforcement – in the process uncovering technologies that could help the sector’s legacy banking brethren.
“From the very beginning of my career, I always enjoyed the ‘thrill of the chase’ conducting investigations, tracking funds, catching bad guys, and protecting consumers,” he told ACFCS. “Today, that energy is still there, taking the form of helping as many people as I can.”
“What motivates me to wake up in the morning and dash to the office is opportunity to help that new person to the world of financial regulation understand his/her roles and responsibilities, and in the process being a little part of this industry’s history by helping contribute to a more vibrant, healthy, and compliant field.”
Ciccolo is also familiar with how criminal groups try to conjure their dark arts on the dark web, and that is no different for nascent fields that appear to offer a veneer of anonymity.
His firm, BitAML, like the man himself, is an ally of those wanting to conquer compliance and do it right – Ciccolo routinely trains virtual exchange firms and related ATM operators on how historic AML requirements weave into crypto compliance – and a bane to those trying to game the system – he has also trained law enforcement to follow the money trail in the real and virtual worlds.
Ciccolo also sees himself as an ambassador to the two worlds he must stride by using compliance knowledge to help bridge the gap between crypto enthusiasts wanting to be part of the exuberance of the roiling crypto sector and the banks that can be wary to engage players in the space – in many cases that link being the vital nexus between the real and digital domains.
Here are some of his thoughts in our latest ACFCS Member Spotlight:
What do you do in your current role?
I advise cryptocurrency financial institutions in best practices and policy related to anti-money laundering (AML) and overall financial compliance.
Since most entrepreneurs entering the cryptocurrency space usually have a business or tech background and little-to-no experience in banking or financial services, compliance is often a foreign concept and business owners need help understanding the various rules and regulations, which, oh by the way, are ambiguous and constantly evolving.
It’s always rewarding when clients leave the conversation feeling empowered to take on their regulatory and compliance obligations.
Our work also includes helping the growing number of crypto-friendly banks in traditional finance establish the proper policies, procedures, and controls to onboard crypto customers. It’s great to finally see more banks approaching crypto with an open mind, rather than simply dismissing it based on fear, uncertainty, and doubt.
In addition to working with financial institutions, we’ve trained members of state and local law enforcement on money laundering and fraud policies, how to identify and seize crypto funds for civil assets forfeiture, as well as the technical mechanics of cryptocurrencies and the various financial services and business models.
Working with and alongside law enforcement has been incredibly satisfying. Our training is currently being evaluated for POST certification by the State of California. We’re excited to connect and educate more members of law enforcement in the Golden State and beyond.
What does your career trajectory in financial crime look like?
Well, I don’t recommend a career in financial crime.
For anyone interested in combating financial crime, I started off in fraud prevention within the lending industry and transitioned into corporate due diligence and investigations before ultimately landing in AML.
Prior to launching BitAML, I was a founding member and architect of the anti-money laundering (AML) compliance program for a top 100 U.S.-based online financial institution. I also served as a project manager for a top 20 global bank, where I led several regulatory and AML audit remediation projects.
Both roles constituted amazing opportunities that continue to serve me well to this day.
Today, I rely on my textured and diverse experience under the risk management umbrella to advise one of, if not the most, game-changing innovations in financial services.
What is the best advice you’ve ever received?
Help as many people as you can. Give to get. If you live both your personal and professional life with the approach of helping others and expecting nothing in return, you’ll be very surprised by what you receive in return. You won’t be disappointed.
What is the worst advice you’ve ever received?
A banker once told me not to get into bitcoin or cryptocurrency. Boy am I glad I didn’t take that advice.
What would you say are the most important attributes for someone in your role to be able to succeed?
Hard work, flexibility, creativity, staying informed, and the ability to ignore or drown out naysayers.
The world of bitcoin and cryptocurrency is constantly evolving, both in terms of the industry itself as well as compliance and regulations. Unlike traditional financial services, which either don’t innovate or mistake incremental improvements for innovation, the crypto space sees the introduction of new products and services on a seemingly daily basis.
This requires one to have all of the attributes listed above, including the lattermost. Had I listened to the critics of bitcoin and cryptocurrency that point only to its weaknesses or what it has yet to achieve, and in the process deny to myself the inherent innovative technology it represents, I would not have succeeded in this role.
Add to which, I would be doing a huge disservice to the crypto, compliance, and broader financial services industry. I’m proud of our accomplishments as a team helping traditional bankers, law enforcement, and new entrants into the space understand crypto compliance.
How has (compliance, investigations, etc.) changed and evolved during your career?
As I said in a speech at a recent bitcoin conference, nothing is certain except death, taxes, and regulation.
As regulatory expectations continue to grow more complex and rigorous, compliance professionals must adapt to meet these standards and strengthen our compliance policies, procedures, and controls. This has and will continue to require hard work, diligence, and a little bit of creativity.
While I’ve adapted to rising expectations throughout my career, the most dramatic evolution has been in the area of bitcoin and cryptocurrency. Although regulated in many ways like traditional financial institutions (i.e. money transmitters, securities, commodities), cryptos require a great deal of learning and rethinking on how to craft an effective compliance strategy, whether we’re talking about typologies and red flags, controls, or the use of new and sophisticated technologies like blockchain analytics.
Bottom line, compliance is constantly changing and evolving. This is only magnified when you add a whole new innovation like cryptocurrency.
What do you see as key challenges related to financial crime in your role or in the sector overall?
Crafting and implementing effective compliance policies, procedures, and controls with so many ambiguities, nuances, and unknowns inherent in a nascent industry.
While regulations are consistent with traditional financial institutions, the strategies and historical compliance practices are not always prudent or practical. In many cases, it requires questioning traditional compliance strategies and coming up with something new or custom-fit. It’s a challenge I thoroughly enjoy!
What motivated you to become a financial crime professional?
From the very beginning of my career, I always enjoyed the “thrill of the chase” conducting investigations, tracking funds, catching bad guys, and protecting consumers. Today, that energy is still there, taking the form of helping as many people as I can.
What motivates me to wake up in the morning and dash to the office is opportunity to help that new person to the world of financial regulation understand his/her roles and responsibilities, and in the process being a little part of this industry’s history by helping contribute to a more vibrant, healthy, and compliant field.
Is there anything that surprised you about your current role?
There are so many surprises every day in crypto. What continues to surprise me the most is the fact that traditional banks and financial institutions constantly ostracize the cryptocurrency industry rather than take the opportunity to learn from it. Instead of closing that account or having a zero-tolerance policy toward crypto, maybe take the time and initiative to pick the brain of a cryptopreneur. You might be surprised how much you’ll learn and be able to share with your colleagues.
Why did you join ACFCS and/or become CFCS certified?
ACFCS is an amazing organization that shares amazingly valuable content, believes as we do that the world of risk is not siloed or divided by company org charts, and is refreshingly progressive in its eagerness to embrace discussions of new and innovative technologies such as AI, blockchain, and cryptocurrency.
While I appreciate the other industry organizations of which I’m a member, I don’t see them as creative, forward-looking, and engaging as ACFCS. It’s great to be able to listen to a past presentation on-demand, even presentations that predate my membership. Also, the no nonsense, one-time annual dues is awesome! Nobody likes to be nickeled-and-dimed.
What is the most rewarding part of your job?
The most rewarding part of my job without question is teaching and coaching people that are new to the world of compliance and financial services. The sense of relief and appreciation from individuals coming into an industry like crypto with limited knowledge and leaving our conversation with new tools and proper understanding is powerfully rewarding. Thankfully, at BitAML, this happens every day! It energizes our team and reminds us of why we’re here — to help others get compliant and stay compliant. It’s an amazing feeling!
Joe Ciccolo, CAMS, CFE, AMLCA
Joe is the Founder & President of BitAML, a compliance advisory firm exclusively serving the bitcoin and cryptocurrency market. BitAML clients include bitcoin ATM operators, cryptocurrency exchanges, traders and trading platforms, crypto hedge funds, lending platforms, and crypto-cannabis solutions.
He is a frequent guest speaker at both bitcoin and compliance industry events, and regularly consults with federal, state, and local policymakers and law enforcement, as well as traditional retail and investment bankers on both cryptocurrencies and customer onboarding.
Joe enjoys volunteering his time with the non-profit, student-led Blockchain Education Network, and collaborating on various crypto- and derisking-related research projects with his alma mater, Northeastern University.
Prior to launching BitAML, Joe was a founding member and architect of the anti-money laundering (AML) compliance program of a top 100 U.S.-based online financial institution. He also served as a project manager for a top 20 global bank, where he led several regulatory and AML audit remediation projects.
Before entering the field of AML, Joe held leadership positions within various risk management disciplines, including vendor due diligence, fraud prevention, and corporate investigations.
Joe is a Certified Anti-Money Laundering Specialist (CAMS), Certified Fraud Examiner (CFE), and Anti-Money Laundering Certified Associate (AMLCA). He is a graduate of Northeastern University, College of Criminal Justice in Boston, Massachusetts.