Article 8 min

Charlene Cieslik: on the forefront of compliance for cryptocurrency


March 4, 2020  

cryptocurrency compliance

Last time, we spoke to Ismaelle Vixsama, an information security governance and strategy professional. In this installment, we’re featuring Charlene Cieslik, a compliance expert who’s risen to the C-suite in finance and cryptocurrency.

Charlene is the chief anti-money laundering officer and chief privacy officer of Coinsquare Networks, Inc. Charlene has held roles as the chief compliance officer, chief anti-money laundering officer, chief anti-bribery officer and chief privacy officer at several Canadian and foreign scheduled banks, where she was responsible for AML/ATF, anti-bribery/corruption and privacy programs. She has also worked at several Big Four accounting firms, where she assisted global financial institutions with AML/ATF program development, post-regulatory exam remediation and AML/ATF investigations.

Charlene currently teaches graduate courses on AML/ATF compliance and cryptocurrency, sits on several advisory boards, and is a frequent speaker on the subject. She recently participated in the United Nations FATF private sector consultation meetings on digital currency in Vienna, Austria, is part of the Transparency International Beneficial Ownership Working Group, and is an advisor with the National Crowdfunding & Fintech Association of Canada. She works closely with the federal government in Canada, advising on the new cryptocurrency AML/ATF regulation.

Charlene holds a master’s degree in criminology from the University of Toronto, is a Certified Anti-Money Laundering Specialist (CAMS), and was an original founder of the Toronto ACAMS Chapter.

We were overjoyed to have the opportunity to connect with Charlene about her journey to the executive level in compliance and learn about her thoughts on cryptocurrency.

Trulioo: Throughout your career you have specialized in a number of areas — from AML, to ATF, economic sanctions, regulatory compliance management, privacy and more (I even understand that once upon a time you were a parole officer). Now, you’re the chief anti-money laundering officer at Coinsquare. Can you tell us more about your career trajectory and how you found yourself in your current role?

Charlene: Out of graduate school with a masters in criminology, I became a parole officer for federal-level male correctional institutions. It was a great training ground to get into white collar crime and financial compliance! Meaning it gave me a foundation for critical thinking and analysis and being able to read people for truth, but I quickly learned I didn’t want to work “in prison.”

I ended up in Ottawa because the Office of the Auditor General had a training program in “value for money” auditing. I flew all over Canada visiting airport drug hangers, police dog training centers and witness protection program offices. I even got to take a helicopter tour of the grow ops in British Columbia. While taking part in an audit on Canada’s Drug Policy, I wrote a paragraph on the new emerging anti-money laundering agency opening in Canada, FINTRAC, and I knew I had to work there. It was a perfect mix for my criminology background and my growing interest in financial crime. I loved my job at FINTRAC, and I am proud that I got to work there in its development stage.

There are a lot of hops from 2001 to now. Without boring you with my whole CV, moving into different roles in consulting, banking, fintech, and ultimately into C-level positions, I gained a depth and breadth of experience across compliance functions, which brought me into crypto. I also had a great mentor who introduced me to other mentors in the consulting and banking space, who helped me make pivotal career decisions, and ultimately that’s what influenced my trajectory. I think all those hops are what brought me here, and I hope I can have a positive impact, as opposed to being a cog in a compliance machine.

Trulioo: Can you share a little about what a typical day looks like for you?

Charlene: If there were such a thing as “typical” in this business, I would!

I will say, there’s a lot of explaining compliance requirements to stakeholder and business partners, regulatory liaising, government consultation, vendor partner management, banking partner diligence, and basic day-to-day oversight of my team and supporting teams, to ensure that the not-so-exciting compliance things like KYC approvals, sanctions screening, risk management, investigations and periodic reviews all get done.

Everyone is in a big hurry to get clients approved and to get money moving. Crypto is a fast-paced environment, and much of the risk-based decisioning is new — there is no playbook. So, my department has to make decisions on the fly. We’re learning as we go, and we don’t always make the right call, but we try to get the balance right between risk and reward.

Plus, there’s a ton of paperwork to evidence our every compliance decision. So, we spend a lot of boring time on paperwork — which is what saves the day, ultimately, in an audit scenario.

Trulioo: You’ve referred to the laundering of crypto as “old wine in new bottles,” so it comes as no surprise that we’ve seen a raft of regulatory movement in this sector. Canada, in particular, is one of the more progressive nations when it comes to regulation, but in your mind, what are the top challenges that need to be addressed?

Charlene: I don’t think Canada is necessarily progressive — we’re slow, and we’re followers, not leaders. I’m worried we are going to kill the innovation in this field with the fear, uncertainty and doubt.

In no way am I saying we need “looser” regulation. But we tend to lean conservative and buy into the hype that every money launderer on earth is trading in his cash for crypto, that every terrorist is using blockchain. Traditional financial markets regulation had years to develop, mistakes were made, they were given time to learn where to tighten up and where to be a little freer. We’re not afforded that leeway, unfortunately, and there are nations taking different stances. It’s going to be a race to the top, or a race to the bottom. We have such a strong tech community in Toronto, so many people trying hard to make this work, and yet we wait. We’re in a holding pattern while regulators battle out just “how to” regulate.

We work very hard to be part of the conversation with regulators. I appreciate that they listen to us for the most part, they take in our experience and our expertise. I hope to have an influence in some way, but I’m not so sure sometimes. There are larger global influences at play. We cannot be expected to have zero risk, when all other financial institutions are afforded the leeway. This is one thing I will not stand for. I try really hard to make sure this point is not lost amongst regulators.

Trulioo: What’s one common misconception about cryptocurrency that you would like to clear up?

Charlene: Given my field of interest — I would say I’m tired of the misconception that cryptocurrency is only used by criminals. Criminals use anything that helps them move money — art, cars, boats, watches, lawyers, shell companies — and cash remains king.

And one more simple thing — you don’t have to buy “one whole bitcoin”!!

Trulioo: What do you see in store for the future of cryptocurrency? Will we one day abolish cash altogether and move in unison toward a decentralized system?

Charlene: This is a tough one for me to answer, even after two years at Coinsquare. Possibly I’ve dealt with banks and governments for too long. I don’t foresee cash going away in my lifetime, but it’s certainly now possible.

Finally, here’s a quick-fire fast five round:

My Eureka moment was …

The day that a CMO I used to work with said “I don’t give a s*** about bitcoin.” I knew it was time for me to leave that mindset and bring what I can to the space to help it succeed despite outdated opinions like that one.

My go-to-app is …

Instagram. Yes, I’m addicted like a teenager.

I like to decompress by …

Riding my motorcycle on long country rides. You can’t think about the price of bitcoin, or the regulator’s ever-changing positions on crypto, while trying to stay alive on a bike.

If I weren’t a chief anti-money laundering officer, I’d be …

Running a surf shack on a beach somewhere really south, and maybe I’d accept crypto as payment for board rentals. ????

The biggest risk I ever took was …

Joining Coinsquare! Coming from traditionally very risk-averse compliance roles, it took a big mindset switch to dive headfirst into the perceived “riskiest” new asset class. Much of the community didn’t want government-regulated exchanges in this space, and I am acutely aware of that. But I do like to think I strike a fine balance as a “cool compliance officer, not like those other compliance officers.” (Ha ha!) I like to think I understand and apply the rule and spirit of the current AML/TF legislation while defending the risks we take, ones that would otherwise be eschewed in traditional finance. But it takes some prodding and convincing, still, for me sometimes! When you’re a hammer everything looks like a nail!

To learn more about Charlene and stay up to date with what she’s doing, you can follow her on Twitter. If there’s a woman on the rise that you’d like to see featured in our Women in Tech blog series, please send your suggestions to [email protected].