At a time when U.S. regulators are clearly pursuing enforcement actions against digital assets, it is really not prudent to publicly market a product to retail investors in illegal off-exchange swaps and proclaim one of the product's advantages is that it allows evasion of AML regulations. It only compounds the idiocy to announce that one is converting the operation of the protocol to a DAO so as to avoid regulatory obligations.

In situations such as this (where there is obvious…

The investment adviser was essentially dead in the water as far as the finding of a compliance violation goes because it failed to follow its own procedures.

Leaving that aside, the question of whether wrap fee accounts are worthwhile for clients is more complicated than how many times the client trades. As the enforcement action notes, the services of a broker-dealer and an investment adviser are somewhat different: The adviser has the task of monitoring the client's account on an…

Should one be needed, this enforcement action is a reminder that the definition of "custody" under the Advisers Act extends well beyond physical possession of customers' assets.

Firms that provide services to municipalities should be mindful that the definition of "municipal advisor" does not correspond to the definition of "investment adviser," and that it is not intuitive.