How is Crypto Being Regulated Around the World? - Denisse Rudich| ATC #506

Join Stephen Sargeant for an insightful episode of the Around The Coin Podcast featuring special guest, Denisse Rudich. Denisse is the Founder and CEO of Rudich Advisory and COO of ElementaryB. Denisse is a global champion of financial crime prevention initiatives with nearly 20 years delivering anti-money laundering, counter-terrorist financing and sanctions solutions across the private and the public sectors and works at the intersection of global governance, financial crime, technology and conflict finance. Denisse is co-founder of Rudich Advisory, ElementaryB and Derumari and is Director of the G7 & G20 Research Groups (London) and an Associate Fellow at the Royal United Services Institute (RUSI).

Host: Stephen Sargeant

Guest: Dennise Rudich

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Episode Transcript

Stephen: Ohh wee This is Stephen Sargeant Around The Coin Podcast. We just finished recording an episode with Denisse Rudich. She's an advisory. She's on research programs for the G7 and G20, and she's also co-founded ELEMENTARYb, which is honestly like a war room for CFOs, understanding the geopolitical risks.

Sanctions risks and how it affects the bottom line. We talk everything about Web3. We get deep into what's happening with MICA and the cryptocurrency regulations in the EU, why we don't really have open banking in Canada. And we talk about everything that they're discussing at the G7 and G20 and why she's building this unique tech stack and how important it is.

For other entrepreneurs to build around other entrepreneurs. This is a good one. You're going to learn so much and have that international flavor. This is the person that's sitting down amongst presidents and prime ministers from around the world sharing her thoughts and she came here to do it for us.

Thank you so much Around The Coin audience. I'm seeing you guys blow up on LinkedIn and Twitter, sharing all your amazing DMs with me about how much you love the podcast, and we appreciate you. We're building this bigger and better than we ever have, and I can't wait for you to listen to this episode.

Stephen: This is your host Stephen Sargeant, Around The Coin podcast.

Stephen: The episode you've all been waiting for, this had to be rescheduled, but we finally got Denisse Rudich. She's the director of Rudich Advisory and also the co founder of ELEMENTARYb. Denisse, tell the crowd a little bit about yourself. I'm so interested to tell, hear about your story, but tell us a little bit about you and then we're gonna dive right into the conversation.

Denisse: Fantastic. So I'm a champion, I guess, of international financial crime. prevention initiatives. I have worked on many, many different initiatives around the world, with the private sector, the public sector. I'm a self described recovering banker, so I did my time in the city of London. I'm also a mom and a sister and a daughter and parent to a dog.

And just really enjoy working in the field of innovation, global governance, and financial crime prevention.

Stephen: I love it. What have you seen in the last 10 years? Because you've been in the traditional landscape, you're now started up your own, you know, fintech risk advisory as well. What have you seen in the last 10 years, either from like the technology standpoint, or just from like the, the elevation of like crypto and solutions that are helping financial crime compliance?

Denisse: So you've definitely seen, or I've definitely seen, a little bit more or a lot more appetite for adopting innovative technologies. At the same time, like there's, before there used to be kind of a, from a regulatory technology perspective, there was always a kind of like, you give us a proof of concept, we won't pay for it.

You let us know, we'll let you know if it works or it doesn't work. And so there's different, There's definitely been a bit of a change in approach with regards to you know, you come to us, so more of a partnership model that's kind of emerging. Also around, whereas again, in the last 10 years, crypto was always a hard no in many institutions and many organizations because of the perceived high risk of money laundering and potentially terrorist financing.

With You know, with the emergence of blockchain technology or blockchain monitoring technologies, and kind of definitely a move to have stronger regulation in place. I'm not going to say harmonization of regulation, because that's not really happening yet. You know, it's just made banks a little bit more comfortable to at least think about having the discussions and offering bank accounts and potentially partnering up with.

Or issuing their own crypto assets as well, and also the reason ruling around ETFs, I think it's fantastic. Slightly better appetite

Stephen: for this. You started at ELEMENTARYb with your sister, a tech stack. First of all, before I get into what that is, what is it like working with your sister? I just did a project with my sister, a speaker reel that was like a minute and a half long, and I probably do not want her as a client ever again.

What's it like working with your sister, working with family? In general, do you have to have a lot of communication, you know, like it's sisters and then you don't want to talk about money and dissolving the business, but this is all the conversations that you would have to have if you co founded it with a stranger.

So tell me about that process. Cause I think that's interesting.

Denisse: Sometimes I revert to, like, my 16 year old self, and we are aware that there is a risk of that happening, and that you can't really do that in a professional environment. Very early on when when, when we talked about setting up the company, I'm well aware of, she's my older sister.

She's also the CEO, right? So I know that she's the boss, but we've put in place kind of, frameworks to make sure that I do not report into her. So I, I have a reporting line into or a dotted line into, um, into a gentleman called Bob and I don't quite remember his role at the moment, but he's on the board.

I'm not on the board as well. So we've kind of put in place different structures to make sure that we are able to actually manage this in a way that's conducive and for the benefit of the business. I've seen a lot of businesses fail. So the conversations around the solution you know, what's going to happen if the company doesn't work out or if the company does work out, but when somebody wants in or out, you, you have to have those conversations with, as a co founder with anybody from the beginning, have the tough conversations, think of the worst case scenarios, come up with solutions while you're still talking.

And then you have that extra tension as, you know, family members. But at the end of the day, you just want everybody to succeed and you want. So there's also that kind of, you know, pressure of making sure that you, not pressure, but just wanting for things to work out and, and going that extra mile for that.

Stephen: You don't want to end up like family Christmases. You have your lawyer next To you. They have their lawyer. But what you can say and what you can't say...

Denisse: Different sides of the world.

Stephen: Parents, like nobody can talk to each other. They have to like write it down. Like it has to be a disposition. But tell me what you're building and. Usually when people are building tech stacks, especially when you're coming from industry, you saw something that was not working constantly with every project that you were doing.

I'm assuming, and you're like, why don't we just fix it? Because nobody else seems to be doing it. Walk us through the thought process in building this company and what you're actually doing, and maybe talk about some features that you're kind of releasing this year or upcoming.

Denisse: So we were actually originally going to build a bank but the funding that you need to build a bank is a lot of money and again, we started right before COVID hit so we've had, so we've had to pivot you know, not just from, from a funding perspective, but we also found around A massive gap in the SME market whereby not only do they have like the right access to financial risk intel, financial risk intelligence information, or even information easily accessible information to things like regulatory changes or the ability to determine when a sanction is going to hit and what's actually the impact on their cash flow.

So what we're building we're building a platform called Sherlock. It's a financial risk management platform, and we're looking to democratize. business, critical intelligence for the SME market. So we target chief financial officers and basically ELEMENTARYb and Sherlock create or provides a war room for them to be able to make strategic decisions around to help them manage their liquidity.

So money coming in, money coming out. Because a lot of companies that are in the SME market start out as entrepreneurs like me or end up being kind of family owned businesses and they just don't have the time or the expertise once they've kind of gotten to that level to be able to, to manage all of these different issues.

Stephen: That's the first time I ever heard someone talk about sanctions from like a financial profit. Cash Allocation or Capital Allocation. Usually it's like Protection Against Risk and, you know, Regulatory Bodies and, you know, Block Filing with OFAC and Blockchain Investigations. I've never heard of someone say, hey, like, if you can't do business with this country that's on the verge of being sanctioned this is going to cost your company X amount of dollars. What's going to be our strategy? That's high level thinking.

Who came up with Sherlock? Who came up with Sherlock? Was that when, like, both of you sat there like, I love it. You, you came, you know, Sherlock Holmes, or was it like one person said it? You have to give that, you have to go to external consulting scenes to get the name because you guys just wouldn't agree on the same name.

Denisse: I mean, we have an amazing team of founders. So there's actually, it was, it was about 12 of us founders, all ex bankers, all people working in the financial services industry. We have Gary Dolman, who used to be at Monzo. He helped found Monzo and was at Starling Bank. I don't think he was at Starling Bank.

We have Bob Lewis, who's worked at some of the top banks, sir. Sir Bob, who's worked in intelligence previously, but he's also worked for some of the top tier banks. Like we have some incredible, incredible people on our team, which has been just an absolute joy and an honor to be able to work with.

So it wasn't just Karen and I sitting in her backyard over a fire thinking, yes, this is what we're going to build, which is really, really exciting. But I'd like to tell you about something else that maybe I'm a little something else I'm working on that might be a bit more AML specific, anti money laundering, counter terrorist financing specific, if you will let me.

Stephen: Yeah, of course, yeah, I thought you were going to jump right into it,

Denisse: jump right into it. Okay, great, thanks. So I'm working of, of, you know, cause I don't have enough to do. I have a co founder out in Switzerland and we've got an amazing team actually scattered, not, not completely around the world, but scattered around England and, and Europe.

And we're looking to generate a Transparency and greater understanding around how financial products can actually be used to launder money. So we're looking at creating an open source platform to help train investigative journalists and law enforcement agencies civil society organizations, and banks in emerging markets.

And again, it's really all about helping people understand the fund flows, helping understand the risk indicators of a product, not who is using a product and what's the risk of the person using a product but also what are some of the controls that can be developed to be. to actually mitigate or minimize the risk.

And then from the Funflow perspective with the journalists I've, I do this all the time, kind of not, not using technology, but my hand and a piece of paper, and I draw little boxes and arrows going all over the place and have found that some of the journalists end up actually following a different path and identifying additional assets once they understand how the products actually work.

Stephen: That's so interesting because ACAM is the Association for AML Professionals, you know, worldwide, based in the U. S. They just did a scholarship program with the ICIJ for that reason, because they're trying to learn more about the flow of funds and what professionals know, regulators know, and us as AML professionals is exactly what you said, right?

They get into places that we never even think about. They're able to identify more and make more connections as we saw with the Pandemic Papers and other, you know, Paradise Papers and other huge reveals. So it's really interesting that you're, you know, helping bring those people together. To kind of consolidate the efforts in an open source platform, which is always hard to do, right?

You're, you're building tech stacks and open source platform. How hard is it to work with the technology? Because it evolves so quickly, how hard is it to build something that's still growing as you're building it?

Denisse: So this is where you find amazing people. So I, we went through, I think it's called tech dating, tech founder dating.

So you find somebody who's passionate about what it is that they do. And also really, really good about what it is that they do. So my co founder in Switzerland that. Guy named Marco and he's, what is the equivalent of the Swiss Institute of, or the, yeah, the Swiss version of MIT. He's a specialist in kind of machine learning and just is a professor and just kind of just loves working on this stuff.

We have a data scientist who just recently graduated from Oxford, who she was like, I'd like to build a large language model. And see how this applies to policy and governance. And then we have somebody else who's a former investigative journalist, former regulator, who's also helping. You know, who herself has been on the receiving end of challenges with investigating complex financial products.

With, You know, the Myanmar junta and places like that, who's working on this. So finding people whose passion is to stay on top of this information as a non technical person, myself, is really, really important.

Stephen: Now you named a couple of regions there, a couple of professionals.

I think a lot of what people see you on LinkedIn and other places is your work with the G7, G20.

You're talking to dignitaries all over the world about regulatory comp or why don't you tell us? What you're talking to them about, how you get into these conversations, talking to presidents and prime ministers from all over the world, and kind of what your function is in those conversations, and how you're kind of elaborating on some of the regulatory compliance needs that these countries, not even companies, that these countries might need to be aware of.

Denisse: So I am director of the G7 and the G20 research groups here in London and, and we were having our little conversation beforehand. I started with the, the research groups about 24, 25 years ago when I was a student at the University of Toronto. And basically it's a network of of students who measure compliance against G7 and G20 initiatives, but also practitioners.

So former Sherpas, former ministers who have. of countries who have held G7 and G20 meetings, academics businessmen and women as well, who are summit watchers. So I, I get the opportunity and I have the luck and the joy of being able to attend G7 and G20 summits as an observer and provide independent analysis and and information to the media, but also do work with sometimes, you know, I do have the opportunity of working with some of the governments that are either attending or that are hosting, and just share what I may recommend that maybe they should focus on, or potential policy areas that they could definitely advance on.

So I'm, I'm an observer and a watcher and then every once in a while, it's a little bit of the invisible hand. And with, you know, with the, with the various sets of states that you, you do have kind of some insane access when you're at these events. And sometimes, yeah, it's, it, it really is a matter of saying I'm a huge fan, but also.

You know, in this particular policy area, you know, I, you know, I had the opportunity of speaking with President Macron about illegal wildlife trafficking and environmental crime. I've spoken with Prime Minister Trudeau about the Wagner Group, which is now kind of taken up by the, being taken up by the Ministry of Defense and brought more closely into Russia.

So I do, I, and then I've I have spoken about diamonds with president of the council of Europe. And the challenges around the diamond industry and things like that. So I, so I do have the opportunity of taking my kind of day to day work sometimes and, and having these kinds of sidebar conversations, which is lucky and exciting and do, do what you can with the opportunities that arise.

Stephen: Now for someone that, and me being included, that's ignorant about G7 and G20. Like, I imagine that there's someone that's like a G21 country, like someone that's outside of that group of 20. Is it some way that you can get into the G20 if you're not part of the countries? Or if someone like Russia, I don't know if Russia was part of the G7 or the G20, where they're like, hey, you're not going to be included anymore because of what you did.

We're going to bring another country into this conversation. It sounds silly probably to you, but I think a lot of people listening are like, I don't understand the framework. Is this something that you can, you know, strive to be for? Or is this like set out in stone, can't be changed?

Denisse: So Russia was actually part of the G8.

So the, so it started with the G five, then it became the G seven, then it became the G eight, and then it became the G seven again after Crimea. So there is a chance for countries that meet kind of, kind of specific criteria, or if they get invited time and time again to be part of the, the groupings that are able to join.

So with the G 20, the, the other thing that. What does tend to happen at every summit is that they invite different countries to attend as either guests or potential observers. So there are different ways that countries that traditionally wouldn't really get involved in the G7 or G20 process do get involved.

You also have the BRICS Britain, no, not Britain, oh my gosh, not Britain, Brazil, apologies, Russia, India, China, and South Africa who have actually just accepted a host of new but again, as, as potentially a counter counter counterblock to the G7 and the G20, but the G20 one tends to be a bit more kind of broader.

Well, because there's 20 members,

Stephen: understandable. But you're also a technical expert. Obviously, you're building a tech stack with your sister. You're a technical expert for the Council of Europe. What are your original thoughts about what's happening with the market in crypto assets? MICA coming out of coming out of the EU.

A comprehensive regulatory plan.

For cryptocurrencies, virtual assets what are your thoughts about, Mike? Is there something that they've missed? Is there something that you wish they could have included? What are your overall thoughts? Are you excited? That's kind of leading the way in the industry.

Denisse: So I am excited that that is that it has come out into the industry.

And I think Micah was a response to, I mean, you know, the response to what they saw as potential spread of money laundering through crypto assets in, in Europe but also response to FTX and Luna. And what happened, and what's really interesting about MICA, or MICA, MICA, I call it MICA, MICA, I keep on butchering it, not that hard is that it also addresses things like consumer protection.

It brings into play the MIFID2, so the Markets in Financial Instruments Directive. So talking about kind of capital adequacy frameworks, they need to have Senior management responsibility and kind of fit and proper regimes to have risk management, not anti money laundering risk management, but just kind of operational basic risk management frameworks in place.

So I think that's really, really important because it kind of allows for the creation of protection for people like you and me. And our parents and our sisters and our brothers and our cousins and our aunts and whoever else wants to put money into the space more protection, which is, you know, essential in my opinion.

Stephen: Now, some of the requirements by MICA are a little bit more stringent than even the Financial Action Task Force had put out there, especially around thresholds, around, you know, crypto transfers and the reporting requirements. Do you think this might stifle innovation in the EU? Because it still seems a lot of countries are moving from places like the United States and setting up their headquarters in France.

They might actually like the strict regulations because They're very, they're, they're not as vague as places like the States where you don't even know if you can build something and you're going to be penalized three or four years later. So do you think this stifles innovation or it actually excels innovation because everyone knows what the guardrails

Denisse: are?

Okay, so I think, Ooh, what a question, Stifler or Accel Innovation. I think it provides for wider market access. If you go into Europe, if you go into Europe, you get a license in one country, then you can passport into any country. You might have to have a local representative in country, but you don't have to go through the same kind of hurdles and jumps and barriers that you would.

Kind of doing it into, into every single country. I think organizations like having the certainty of, you know, not having to follow if they're operating like in 70 different countries around the world or have a touch point into 70 different countries around the world, at least having one cookie cutter recipe that they can then replicate across different jurisdictions.

And instead of having to recreate from a regulatory perspective, definitely like recreate them. The cookie, or the recipe from scratch every single time. In terms of innovation, I think, I don't know, I think you're always going to have innovators. But whether the products are going to be able to be offered by the exchanges that are being regulated, or the counterparties that are being regulated by MICA, that's the challenge.

Or whether they just start kind of broadening the net to catch some of those new regulatory, or those new innovative projects. Now

Stephen: you're seeing in the EU, there's a big push around like close to being banks, like banks, but you can't call them banks, but they pretty much, other than deposits, provide the same services a traditional bank was.

So you see open banking really opening up Europe, the United Kingdom, and other places for these kind of transactions. But we're seeing Canada, and you're, you know, used to be Canadian, you're a fellow Canuck, you're seeing it's like completely stalled out in Canada, even though they have a broad and more comprehensive crypto regulation.

Open finance seems to be like one of those subjects that, you know, the majority of those, you know, lobbying for the Canadian financial ecosystem do not want to include.

What are your thoughts about open banking and how can we apply some of the lessons that you're seeing out there in the UK to the Canadian market?

Denisse: Open banking is absolutely fascinating because it's one of those things that as a person in, you know, in that, in living in England, you just use without realizing that you're using it, that you're doing it. All of a sudden, it's really easy to make a payment online. It's really easy to send money from one place to another.

Money suddenly shows up in your account instantly. So it's kind of. Like a little bit like magic. And you're like, Oh, okay, that's great. And it wasn't until I had a chance to write a paper on kind of the money laundering requirements for payment information service providers and account information service providers and the challenges in, in kind of applying anti money laundering regulations that I started understanding a little bit more about it.

So there's over 60 countries that have introduced instant payment. Frameworks and Rails. There's different models, there's centralized frameworks, there's decentralized frameworks it's all kind of linked to APIs, and in the UK, over 60 percent of the population use open banking. But again, most people aren't even aware that this is actually happening, right?

So in Canada, I don't I don't actually understand the challenges with introducing open banking from a technical perspective. Again, I'm not really sure how technically difficult it is. Again, to me, it's, it seems like it's APIs plugging. And at the back, I may be completely wrong. You know, it's partnership development and things like that.

But the biggest challenge here was determining kind of whether, you know, whether payment initiation service providers, so people who kind of triggered a payment versus account information service providers, which is share data. Needed to be regulated for AML. I don't know if that helped, or whether that answered your questions even, but.

Stephen: It does. I think one of the biggest hurdles is you're dealing with a monopoly of like five or six major banks in Canada, you know, where they have a stronghold, versus like the United States where they have hundreds of small charter banks, or, you know, it's a lot easier to kind of like say, hey, you already have so many in Canada.

Like, even for me, you talked about payments. Like I have a couple of clients in the United Kingdom, I can't get a deposit in Great British Pounds directly to my account. My account doesn't offer GBP denominated accounts. So I have, they have to send it through Wise or they have to go through and, you know, convert it to the U S to send it to me.

And that just shows you how difficult in this day and age to get a simple payment from a client, how still tricky that is in Canada and the need for this open banking. Do you see any big concerns? I think there must be concerns.

Denisse: I mean, it's also hard getting foreign payments into the UK. Like, there's still a lot of friction in the international payment system.

I, you know, I mean, I have, I think I have to use Wyse or some sort of other provider as opposed to my bank because it's It's less expensive, it's faster and, and so this is kind of the, where the importance of e money institutions and kind of those types of companies are, are essential for global finance to continue working.

But I'm still astounded that in this age, I can't just link onto my bank account and make a foreign payment without there being like a lot of friction. And I think this is where open banking is great, right? Like it's frictionless. It just kind of happens. It's, like I said, it's like magic.

Stephen: And it's like really the pitch for a kind of cryptocurrency because we're talking about, you know, London, United Kingdom and Canada.

We're not talking about like countries like Nigeria and Kenya where you have, you don't even have access to capital. You can't run into there and get U. S. dollars. It might take a month. You might not even get it at all. So we're talking evolved financial ecosystems. Where you still have a, you know, problems sending funds overseas from your computer, right?

Like you could do a wire transfer, but there's a 9 percent chance it's going to get lost. They have to call the other person. They send it back. There's as you said, there's so much friction in sending funds and the expense of it. It doesn't really make sense.

What are the conversations you're hearing in the G7 and G20 when it comes, when you talk about like maybe stable coins, easier access to payment, cryptocurrency, and I probably assume that the conversation of AI has come up maybe in the last few meetings.

What are like some of the rumblings that you can discuss that are definitely on the minds of the world's biggest leaders?

Denisse: Right, so I actually had to check my notes for this one. I don't know what's happening to my internet there. Right. So at the moment, so the definitely cryptocurrencies have been discussed specifically at the G7 or well, G20 levels I think it was in Argentina was the first time it was discussed and the need to regulate what happened at Delhi this past year was that there was definitely a need.

The recommendation for all countries to, who are G7 or G20 members, but also kind of on a global basis to regulate, supervise, and maintain effective oversight of crypto assets and stable coins, and also to avoid regulatory arbitrage. So that was huge because again, you're calling for global regulation of crypto assets and also the introduction of stable coins.

There was also a call for the need to manage money laundering risk, proliferation financing risk, and terrorist financing risk, which again is something that's kind of come up more recently and linked to crypto and how actually big the problem is, I think still remains to be fully seen and documented.

Travel rule. Was huge, so the need to actually have travel rule implementation the level of travel rule implementation on a global basis is not as much as you would have hoped by now and again, the travel rule is all about including the originator, the information around the sender of a crypto asset and who's actually receiving it, and there's a lot of Challenges that I wasn't completely aware of until, again, doing a bit of a deep dive into the travel rule.

They're, they're, so leaders also called for a need to identify risks associated with DeFi. And again, we saw the US issued their DeFi risk assessment last year. With regards to central bank digital currencies, you know, we've seen. I think it was at 130 countries that are looking at adopting a central bank digital currency.

So it's, I mean, it's, it's just going to happen, right? And so there was a need to identify, you know, it wasn't really about money laundering, but look at macro financial implications. And I think, please don't ask me to describe what that is at this moment. My brain just cannot do it.

And on AI, I think everybody's a little bit.

So there's a need to kind of, you know, there was a call to leverage AI for public good, but also to have kind of ongoing international discussions and cooperation about AI governance and how to protect the world from AI, because I think there's there's, there's been conversations about having kind of societal level catastrophic incidents because of AI and, you know, so that, that's scary.

And that needs to be addressed.

Stephen: And we've seen right now, like, there's people having further conversation.

Taylor Swift gets put in some AI illicit, you know, content. And all of a sudden they're like, hey, we have to take a serious look at this. And the Swifties, you know, everyone reacted. I think the Taylor Swift controls everything right now, right?

She's at the top of conversation for AI regulation. And she might win the Superbowl herself. Like they might just put her on the field. Cause that's the only way anyone's watching the Superbowl now. Nobody cares that Usher's doing the halftime show. They are doing like live pay by play of Taylor Swift.

Doing the wave in the stands. Like she's got it going on. I have to give her credit, man.

Denisse: She's, I, I think she's even been credited with helping reverse the decision in Guatemala for the latest presidential elections. I, you know, there were, I think it was the Swifties or there was there was a candidate who was You know, he, he won, he, he tweeted something out around Taylor Swift or sent out a TikTok video around Taylor Swift, ended up winning.

They tried to reverse it, but again, somehow, somehow connected to Taylor Swift, he is still now, you know, present, going to be, or, or is the, was labeled as the winner of. Being president of Guatemala, so it was just, she's everywhere.

Stephen: What are your thoughts on that? We're around the same age, I think, of millennial.

I don't know if we're millennials or we're not baby boomers, so we definitely are somewhere in the millennial stage where I think when me and you both were growing up, like our converter for the TV was plugged into the actual tv, like you had 13 buttons and it was plugged in. To now, you see that, like, somebody that just goes around asking some of the questions is driving, like, 400, 000 cars because they have all the attention.

What do you think about influence? Because I think this is a conversation governments are taking note of, too. There's a lot of, you know, even the U. S. candidate, like if you're not out there on Twitter making noise and having content and social media, that is definitely part of the strategy now, more so than maybe your public policies on abortions and other things.

What are your thoughts about the way this is influencing now we're seeing government elections what are your thoughts on influencers and just the way social media has has evolved over the last 30 years?

Denisse: It terrifies me that Elon Musk, or Donald Trump, or Taylor Swift, or somebody who has millions of followers can send out a small tw is it still a tweet?

On X. I mean, I don't know what it's called right now, right?

And influence the, the loss of billions of dollars on the market. And then also the impact on the shareholders. And, you know, I, it just baffles me that that can happen with an instance, right? That there can be runs of banks, that there can be, that it. A crypto platform can suddenly go from hero to zero per se, right?

Because of one message by one person on a platform that suddenly goes viral. I also, I mean, I have a school aged child.

I was watching the new version of Mean Girls and just the proliferation of media and how one message, you know, the threat of misinformation and disinformation and actually how we have seen that influence elections and influence I'm currently working on a project where we're actually considering potentially using some influencers who, you know, have embedded and whatnot to be able to, you know, to promote citizen engagement and participation in using a technological solution for good.

So I think there's definitely a role, a, the fact that I mean, Stephen, you're an influencer, so thousands of people follow you. I have a

Stephen: little small army there on

Denisse: LinkedIn. You do have a little LinkedIn army and, you know, and people pay attention to what you say. And I think it's, you know, but you're also incredibly I don't know if you're, if careful is the right word intentional with your content, I think.

And, and I think. That's also one of the things about, you know, there are influencers who are out there just doing stuff for self promotion, but then there are influencers who are out there to help people and. To share information and to do good. And I think that's where, where I do think that there's a really good role for influencers.

Stephen: That's where all the keyboard warriors were about to come at you. You're like careful.

That kid is not careful about anything he says, but now I have to kind of bring this back to ELEMENTARYb. How do you now go into the war room to talk about sanctions when Donald says, Hey, you know, you know, we got bigger bombs.

Like when you see a tweet like that go out to a country like North Korea, how do you kind of manage that internally? Or when, you know, someone tweets about another country or, you know, Justin Trudeau says something about India. These are all major impacts. How do you kind of manage that in the war room?

Do you weigh that information because you cannot completely ignore it anymore?

Denisse: Yeah, no, I think and this is also part of horizon planning, right? And I think it's also about being, so risk management, horizon planning, and then having the right processes in place as a corporation to not just react, right?

But actually assess the impact of what is being said and then being able to Make a decision about how to act. So there's a tweet that goes out. Is that actually going to have an impact on your bottom line? I mean, I'm just thinking of Ronaldo and Pepsi and water. Was it Coca Cola or Pepsi? He chose to drink water and that led to a drop in billions of dollars in terms of the value of the company.

And so again, it's about, is it a short term thing? Is it a long term issue? And then what are the, you know, what are the communications that needs to go out around that, but also cybersecurity controls are really important, right? Because if something goes out negatively, so again, I know that we're going beyond the question that you said, or that you asked, but, cybersecurity controls, penetration testing And just proactive plans and incident planning and response planning is essential for being able to actually manage your business.

Stephen: These are real concerns. I love that you went there because, you know, Coca Cola can survive or Pepsi can survive 4 billion loss or Snapchat might be able to survive. Kylie tweeting, does anyone still use Snapchat? But a lot of companies you're dealing with, they probably couldn't survive something like that.

So they have to put those controls in place and they have to have those conversations because once we will end their company and you know, their investors kind of walk away and there's, there's serious impact to the CFO and their bottom line. We talked a little bit about the impact. We saw the impact with Starbucks, with Israel against Hamas.

You were on TV or on a news channel talking about that. We see that there might be a ceasefire, but this has been going on for over a hundred days now, and it seems that, you know, the death toll has been large. Are we going to look back two or three, five years from now and say, we could have handled this differently?

What are your thoughts about the way we're handling it now, and if we're going to have regrets looking back?

Denisse: This is where I'm going to take the fifth. So I, I, I think as I've mentioned before, I'm not, I'm not technically, I don't feel like I have the technical expertise to be able to precisely comment.

There's so many, this is such a complex conflict affecting not just the Israelis and the Palestinians, but also the wider communities around the world. And I think this is where I just, I wish there wasn't a war. But I don't, I don't have, you know, I don't think anybody has the silver answer for, for how to address this conflict.

Stephen: Do these concerns come up in conversations when you're working with SMEs? Obviously it's a realization of what's going on around the world. And it's not just this one. There's things happening in Congo. We're seeing, you've probably seen this. For generations where it's just a little bit more exploited now because of the media, but I think in Congo, they've lost 2 million people over the last 10 years that maybe nobody's talking about as much.

But around batteries, going into your cell phones. How do you encapsulate all this information to make a decision as to how you're going to put in the right processes for a small company, right? Or even an emerging tech company. How do they factor in all these things happening around the world in real time?

Denisse: And I think that's also part of the reason why we're creating the platform that we're creating. A lot of, again so it's not always that easy to make a link between Human rights abuses. I mean, there are people that are able to do this a little bit more easily, especially that work in these fields, but human rights abuses and a mine.

Or the fact, let me use the example of the Central African Republic. They introduced a new project called the Sango Project which they, first they made Bitcoin the second official currency in the country. Then that was, you know, the, the Supreme Court of Justice revoked that, they decided to step back away from that then they created a new project introducing a new coin coin, not cone.

But what's really concerning to me is around the tokenization of natural resources. So they're creating a framework whereby and actually a lot of the natural resources that are being used or that need to be used for, to transition to a greener economy are actually found in the Congo. So the fact that there are individuals who are.

Creating a framework where they can tokenize and own these assets on the ground and in the metaverse and own land in the Central African Republic to me is incredibly concerning. How that affects, you know, how you then convert that information into price stability. For a commodity, for the price of a commodity, and then access into the international market, and then access into the supply chain of a corporation, and then the impact on liquidity, and the bottom line is something that we're, again, trying to do.

continue to work on at the moment. But at least we can provide some of the intelligence and some of the changes and some of the potential risks that, you know, there's an algorithm that can make its own decision and say, this may or may not affect your bottom line. And something that we're going to be, you know, that we're working on as well is building a marketplace to allow SMEs to access banking products that are traditionally only accessible for like The large global conglomerates, right?

Like invoice factoring, trade financing solutions, letters of credit. As a small business, really hard, like you're just not profitable enough, essentially, to, to have that kind of necessarily that relationship. And there's very, very few banks that offer those kinds of services. Hedging, you know, like grand scale FX trading derivatives and things like that.

So we're hoping to Also build that into our marketplace to help them. So not only tell them you might have a liquidity problem, but these are some solutions that you might want to check out.

Stephen: I can see this as a really profitable business. Even like benchmarking, right? These are just, you know, indexes that people look at, stats that people are looking at, and they like to look at historically, right?

Even if you benchmark it today, historically, people are going to look back and say, okay, during the worst time during this pandemic, this is what happened. We have another pandemic, so we might be able to expect certain similarities here based on these categories, et cetera. Sounds like a great business.

People love data and companies pay a lot of money for that data and benchmarking. One of the interesting things that you're also a fellow at RUSSI, which is the Center for Financial Crime and Security Studies. I love RUSSI. They put out some amazing content. They have all the best fellows, including yourself doing, you know, things around the world.

Tell me a little bit about what are some interesting pieces of research you've either worked on or that have come from RUSSI. You're like, Oh, I'm really proud of some of the stuff that they've released here.

Denisse: So like you, I'm a, I'm a huge fan of everything that they do in, I mean, there are so many different, they tend to work, you know, in financial crime across the ecosystem and also all the different spaces.

So I'm a huge fan of things that Alice and Owen. She's their crypto expert Kayla Isenman used to be at Roosie and also did a lot of work on North Korea, which was absolutely fascinating. David Kyleisle, who's now at Elliptic, is also a fellow at Roosie he just came out with a book. I can't off the top of my head, remember its name, but he was Crypto Launderers.

Stephen: Crypto Launders. I don't know, I bleed, I bleed blue and orange, so it's hard for me to remember. Yeah,

Denisse: I know, but he's, you know, like a true kind of financial crime crypto expert, like one of the first people who was, who was writing about this 10 years, not 10 years ago, maybe about seven years ago or

Stephen: something.

Maybe, like it's 2024, it's like 10 years is like. Everyone used to think Bitcoin's only 10 years old, but now it's like, you know, almost 15.

Denisse: So 10 years sounds a little bit A little bit more, a little bit more. You and I were talking about Eamon Larkin beforehand, right? Any of his content, if you're on LinkedIn, he's also a fellow, follow him.

Isabella Chase, who's at TRM Labs. Her content is fantastic. Samantha Sheen, Malcolm Wright. I mean, I'm sorry, fellows from RUCI that I have not mentioned. Naomi Tambay, Matthew Redhead, all of his work on terrorist financing. I mean, there are so many of Of fellows and, and everybody's kind of an expert in their own right.

I'm gonna, you know, if you, if you wanna read anything that I write, please go ahead as well. I work hard at it, . And then there's also a podcast they have the Suspicious Transaction Report podcast. And their events are fantastic as well. So I, I think I've stopped. Plugging Roosie now,

Stephen: but voiceover to, like, mention all the fellows that you didn't mention so they didn't feel left out.

Yeah, Like, we're just going to read off the list. Olivia Craft. Like, we're doing attendance in

Denisse: the classroom. David Lewis. Mike Levy. Just, there are so many. Jessica Davis.

Stephen: You mentioned so much about Web3. You talked about Metaverse. You talked about DeFi, decentralization. When I say the term Web3, like, what's the first thing that comes to your mind?

Like, when I say Web3, what's the first thing that kind of do you think about? Do you think about decentralization? Do you just go to like, oh, the NFT that I bought in 2021 when the hype was around? What's the first thing that comes to your mind?

Denisse: A lot of electricity usage. Yeah. I think that's, and I hope they don't turn the power off.

That's my, my kind of thing. And also I always think about I think the, the reporting of crimes on Web3 and Interpol's reporting center, and how do you manage that in a decentralized world? What jurisdictional, like what country, what laws apply of which country to a particular Or to a particular incident or particular crime that's happening in the Metaverse.

Stephen: Lastly, before I let you go, we've seen a lot of, we've seen protests, protests are more frequent, you know, it doesn't matter what the, you know, what they're fighting about or what they're protesting. It's a lot more rampant than we saw, you know, growing up. And I think the trust in government has kind of been eroded, especially over the pandemic.

What are your thoughts, like if you had to speak to, if you had to do a one minute speech to G7, and I think, you know, that was what, And Davos was about, is like, rebuilding trust. What are your thoughts about how we can rebuild trust? If you had to do a one minute speech to everyone in front of the G7 and the G20?

Denisse: I think citizen engagement and engagement of youth and marginalized communities, which make up a large percentage of voters is really, really important in tackling disinformation and misinformation. And keeping the internet as safe as can be because it, it continues to be a place where people can put whatever it is that they want on there.

And I think there's definitely, you know, you're seeing a, you're seeing more and more kind of tech companies coming forward and, and. Making pledges to remove terrorist content and CSAM images I don't really want to say out loud what CSAM stands for but it, it's pretty awful or kind of working with, you know, you are seeing a lot of, Organizations working with law enforcement to to tackle kind of hate and misinformation online, and I think if we can do more around that, but also, you know, tackle corruption, you know, there's definitely, I think when, when you're talking about erosion of trust here in the UK, The UK has gone down on Transparency International's Corruption Perceptions Index, and some of that has to do because of what happened during COVID and allegations of corruption around that.

When the political elite kind of take for themselves, but there are no roads, hospitals are awful. Children can't get educated or have poor access to education. You know, things like, I mean, there's obviously a lot more kind of impact of corruption. That's when you start seeing the threats to democratization you know, poor governance and, and crumbling institutions.

So I think focus on those things.

Stephen: I think citizen engagement is important, even during like the kind of Black Lives Matter movement, people will bring me in on speakers and they're like, they have all, you know, charcuterie boards for everyone and everything. It's like, the one thing I always used to ask them, like, have you talked to a black person at your organization or anyone that you feel is impacted by this at your organization?

And the looks were kind of like this wide eyed, like this wide eyed look, like you just spent millions on events and sending to this organization and this charity and that's great. But like, have you talked to your own peop Have you talked to your own people, regardless of whether it's Black Lives Matter?

It's been three years since you've seen anyone in person. Like as a CEO, instead of attending every event and being featured on every podcast, have you just picked up the phone and call people and say, Hey, how's it going? How are you doing? Anything I can do? And I think we've lost that engagement.

We're more just kind of shouting to everyone. We're more concerned about our personal brand versus like the people that are working within our organizations. And the same, to your point, goes to the government. They've, like, I've never received a call from the government other than to say, have you received the vaccination?

That's the only time I've received a legitimate call from a government authority in Canada. And I'm like, oh, the government doesn't, doesn't text me when they owe me a tax return. But they want to make sure that I'm getting a booster shot. I found that a little bit interesting. And I think to your point, engagement needs to be a priority.

Denisse: And the need to address bias is specifically when you're training AI. Use data from multiple sources that are representative of multiple communities. And I think that's the one, one thing that just needs to be driven home again and again and again and again, because we are having a lot of algorithms being created with data that's particular to one one, Class and type of people.

And I think you and I have talked about this. A lot of people don't know that I'm actually Latino. I am Mexican, so I may not exactly look it, but to me, this is also really important. The need to address bias.

Stephen: And the need to bring it up in conversation, just like this, because a lot of people would say, Oh, no, I didn't know.

And then having a conversation around that. Lastly, before we let you go, we have one minute. Give us a thrill of the show. Tell us all about where people can find you. Anything that ELEMENTARYbee or your advisory company is releasing this year. You have one minute. Give us the thrill of the show.

Denisse: So I tend to post on LinkedIn.

All of my other social media is Supposed to be private. I try to keep it private because of, again, the field that I work in and, and the exposure that I, I, I tend to have. ELEMENTARYb can be found at www. ELEMENTARYb. com. Rudich Advisory is www. rudich, R U D I C H, co. uk. And if anybody is interested in working with us to create transparency around complex financial products.

or crypto asset products. We are looking for co creators and, and partners with, you know, the knowledge that we are a startup at derumari. com. So that's www. derumari. com.

Stephen: I love it. Thank you so much, Denisse. I know you have to go. We really appreciate it. And we look forward to having you back on the show and just seeing what you're working on.

It looks like you have your hand in a lot of things, so we're super excited.

Denisse: And I just, I mean, Stephen, you know, I love talking to you. So anytime, please. Thank you.

Stephen: Awesome. Thank you so much. Thank you.