Yanire Martes, chief adviser at digital asset banking platform Dinara, said some news about the cryptocurrency industry in recent months has “shocked the conscience”.
In one of the most well-known examples of troubling developments, crypto exchange FTX has filed for bankruptcy, with its new CEO claiming the company is suffering from “a complete failure of corporate controls.”
Martes said Dinara responded to various headlines by staying in “scrunch up and make a mode,” especially when it comes to compliance.
The main priority for the newly established company in this regard was to position itself to operate as a regulated banking entity even though it was not directly required to do so.
“It means a level of rigor and discipline that I think is incredibly important and really represents our commitment to making sure this is a safe and effective platform,” Martes told Legal Dive.
Banking regulations
Dinara aims to serve as an integrated a banking solution for venture capital firms and startups that manage and transact in fiat and crypto assets, but makes it clear on its website that it is not a bank.
Yanira Martes
Courtesy of Dinara
As a result, Martes said the company is in talks with a banking partner that she could not name at this time.
With regard to this planned collaboration, Martes said that Dinara has commenced operations in compliance with the federal Bank Secrecy Act and its implementing regulations. These include anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations.
In addition, Dinara is registered with FinCEN and is seeking money transmitter licenses in all applicable states.
Martes said those efforts were resource-intensive, but could be a key differentiator for Dinara in the largely unregulated digital asset space.
“What sets us apart is that we have been proactive about building and properly establishing comprehensive regulatory compliance,” she said.
Martes, who joined Dinara in August, said his compliance initiatives will also position the company well to comply with any additional regulations that may come down the line.
A new role
The compliance work that Martes oversaw at Dinara came during her first experience as a general counsel.
She previously served as Head of North and South America Legal for OANDA, where she was the head of legal and regulatory affairs for cryptocurrency and other crypto product launches and trading offerings in the US.
Some of her other legal experience included working as aassistant general counsel at the International Exchange and Derivatives Association (ISDA) and as an Axiom Law attorney at Morgan Stanley.
While not a compliance expert, Martes said Dinara’s commitment to regulatory compliance in the crypto space drew her to the position.
“It was explained to me from the outset that one of the key initiatives was to build the company with a compliance foundation similar to that of a regulated entity,” she said.
Martes credited the support of outside consulting firm FS Vector for helping Dinara develop its compliance operations, calling them “my trusted partner from day one.”
To date, Dinara has gone live with digital assets of its platform and is working with its banking partner to launch the Fiat side of its business.
Following the news
Meanwhile, Martes said one of the benefits of following recent headlines in the crypto industry, such as the developments on FTX, is understanding what went wrong in order to chart a better path for Dinara.
For example, she said Dinara makes it clear that clients’ assets belong to them, not Dinara, and that clients’ assets are held in completely separate accounts.
In addition, the company does not engage in remortgage, which is the case with financial institutions re-use assets that clients have put up as collateral to secure their own loans. She said Dinara also does not mix funds.
“It turns out to be a really key element that we need to highlight given what we’ve learned and what’s happened out there,” Martes said. “And I think if what comes next is an actual regulatory requirement for that to be the case, we’re ready for that.”