YGA 24 | Crypto Compliance


In this digital era, crypto has taken center stage when it comes to socialization and investments. And like everything new, concerns arise, especially from those who are not familiar with the space. If you are someone looking to invest or already have invested and are wondering if you made a safe trade, we have a show for you. Tune in as Brandi Reynolds, Managing Director of AML & Compliance at Bates Group, talks about crypto regulations and compliance and shares insights on the risks and benefits of both DFIs and regulated exchanges.

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Safe Trades: Crypto Compliance And Risks In An Unregulated World With Brandi Reynolds

Welcome to another episode. I am delighted to have with me, Brandi Reynolds. She is the Managing Director of the Bates Group. She handles compliance with state and federal laws, which is very important in the crypto space. Brandi and I ran into each other. We had a fated meeting at the 2021 Bitcoin conference. I got into a conversation with her because I was wearing my Goddess of Crypto t-shirt. Brandi, welcome. I am so happy to have you. What a lovely series of coincidences led us to this moment. I am so grateful. Tell us a little bit about who you are and what you do.

I am the Founder of CorCom, a consulting firm that focuses on state and federal compliance. It is a heavy topic. We can get more into that. My consulting firm was acquired by the Bates Group. I focus a lot on helping companies with their compliance obligations. I am brought in to help with all things compliance.

I want to talk about your journey of going from entrepreneur into this acquisition because there are a lot of women who face these similar decisions like, “Do I keep my thing or go to the big thing?” What would you say is going on with compliance? Ground level, how do you define compliance? What do you think are the big issues that we are going through?

One very quick summary of the space is it is very complicated. For this industry, a lot is happening from both the state and the federal levels. For me, being able to help these companies manage everything that is happening here, all the different legislation coming up, what is on the books and how to comply with that is an absolute focus point there. It is something that companies are striving to fully understand. It is a complicated space.

I have been lucky enough to meet the SECs, Hester Pierce, who is known as an SEC mom. I saw her speak. I also spoke with her for a while before she talked afterwards. I keep up with her on Twitter. Hester is one of those people who is stuck between a rock and a hard place. She has Gary Gensler, the Head of the SEC. I never knew who any of these people were ever or cared about before I got into the crypto space. I am like, “Gary Gesler annoys me.” Hester Pierce, on the other hand, seems super logical and intelligent. He desires to have a middle-of-the-road simple solution to a lot of what is going on.

I want to address this. I am going to say my layman’s perspective. I want you to correct me where I am wrong and add anything or maybe say your perspective on this as a person as opposed to a compliance officer. My observation is that the SEC is slowing the role of crypto as much as it possibly can by refusing to regulate a lot of it. It is taking its sweet time to do those regulations but even as it has supposedly created a CryptoZar. They announced that anyone who was going to be creating the crypto regulations is not allowed to have any crypto holdings, which is incredibly disappointing and also outside of the scope.

It is like saying, “The people who regulate the stock market cannot have any stocks.” That is not accurate. It is not the way that it has been done. I could certainly imagine that people like Clarence Thomas and Samuel Alito, the Supreme Court Justices, should never have been making any abortion rulings given the fact that they certainly cannot carry a baby themselves. It does not seem logical to me. There is another issue, which is the idea of these ETFs, the managed funds that Canada has approved and Australia is running.

The United States keeps turning down and has been turning down since 2012 the ability of Bitcoin-managed funds to be legal. I feel there is this like, “Let’s put the brakes on and get the stupid people to make the decisions.” I am not sure why. That is my layman’s perspective on this whole thing. What did I get wrong? What do you think?

YGA 24 | Crypto Compliance

Crypto Compliance: There is a balance and a need for both DFI as well as regulated crypto exchanges because otherwise, we won’t see that full adoption and people really embracing it and what it can be.


You hit a lot of it pretty spot on. There does seem to be a little bit of a power battle because you have a lot of federal regulators. In my perspective, they want to own the crypto space and regulate it but they do not necessarily know what to do with it and how. You do get these regulators. Many of them have never been active in this space from either a simple user or individual perspective. They have never traded crypto or worked in space. They have never been an attorney, compliance professional or a business person in the space. To me, it is hard to fully grasp the concept of making these regulations if you do not fully understand it from the ground up.

That is a huge challenge. I love the opportunity to speak about compliance, regulations and what is happening in the industry because we need to educate people. That is part of all of our responsibility, even if you are a layman, a user, you love to trade or crypto curious. Whatever role you play in this space from professional or being a consumer, we have to help these regulators understand that crypto is not going away. It is here. Everyone needs to figure out what to do with it thoughtfully so that we can regulate it and integrate it more so into our day-to-day lives.

Let’s back up and talk about what it means to regulate in the first place and why we might need it versus not needing it.

I have been in many different conversations about this as well. I can play both sides. I can play the side where should you have regulations on crypto, which the initial idea and intent is to have that de-centralized new ability with crypto and all the great things that means. On the other hand, with my compliance hat on and where I am in this space, I can also argue the benefits of having some regulation. To me, there is a balance and a need for both DeFi, as well as regulated crypto exchanges. Otherwise, I do not think you are going to see that full adoption and people embracing it and what it can be. From my perspective, I am taking off my compliance hat and seeing if I could build the framework.

I would allow the opportunity to have both the DeFi and the central asset changes because I do think that with the Coinbases and your Robinhoods out there, there is a certain audience that they will cater to. Some would likely go that route of wanting some safety net and knowing that there are regulations and something to back it but then there is also the flip side of it, those who do not want to go that route.

A couple of definitions for everybody. Know that DeFi is Decentralized Finance. Decentralized means that there is no gatekeeper or one single owner. In the case of most of this stuff, there is no central platform because everything lives on cloud servers but specifically, there is nobody who is making the decisions as a single person or unit. It can be not a good thing because people are still going to be people. When Brandi is talking about the centralized exchanges, she mentioned Coinbase and Robinhood. Coinbase is the most well-known but we have seen several of these centralized exchanges, which hold your crypto for you.

We have seen them go under. Voyager declared bankruptcy. That is by the Winklevoss twins who are doing this all day long. They have been in the crypto space since 2012. They are Bitcoin billionaires. Both of them have done incredibly well for themselves. I am shocked that they have allowed this to happen. It shows how overleveraged the entire industry has gotten already. We are starting to talk about people’s greed, which is another piece of this conversation. Regarding something being decentralized, it gives you more freedom. A centralized exchange means they are going to be holding what is called custody. They hold your coins.

There is an expression in the industry, “Not your keys, not your coins.” When you have a cold wallet, which means a little piece of hardware that holds your coins, you have a key to that. It is an extremely long set of numbers that no one in the world could ever remember. You have what is called a seed phrase. You have specific words that are bizarre and out of order. There are somewhere between 12 and 24 of them. Very famously, the Winklevi, back when they were keeping their Bitcoin safe, took copies of their seed phrases to 4 different banks in 4 different states and opened safety deposit boxes. They were that worried about having something stolen back in the day.

[bctt tweet=”Whatever role you play in the Web3 space, from professional or just being a consumer, we have to help these regulators understand.” via=”no”]

We are starting to see the demise of some centralized exchanges because they tend to loan their crypto out and loan it on margin. When Bitcoin’s volatility has gotten so extreme, we were at 68,000 and then down to right around 20,000. That is a huge fluctuation. It is not an exceptional fluctuation for Bitcoin. It is not even an exceptional fluctuation for stocks but it is still pretty scary. What is happened is all of these overleveraged people have gotten margin calls, have not been able to pay and defaulted. It is like the scene in It’s a Wonderful Life. It is causing a run on the bank and then the bank will go out of business.

I was talking to somebody about the scene where Jimmy Stewart is standing and trying to stop the run on the bank with all the citizens. He says, “Your money is not here. Your money is in Joe’s house and Millie’s house.” They all did not realize that. They all thought their money was sitting in the bank but everybody still thinks that many years later. He says, “How much do you need?” I remember the black lady comes forward and says, “I need $10.” He is like, “Thank God. It is going to be okay.” Everybody then follows suit.

Everyone enthusiastically got behind, “Let’s support the bank and keep the bank of float.” We do not think like that. We tend to think that the bank is keeping our money safe but if the bank stops doing that, we do not trust the bank. The bank is loaning it out, not just 100% but multiples of what we put in. Brandi, do you know what the multiple is?

I do not.

No one does. I was hoping you know because you are in the industry. They do not tell you but it is probably maybe 6 to 8 or even 20 times what their assets are. That is another thing. That is an example of why you need regulation and why compliance is so important. Compliance means agreeing with and acting in accordance with whatever the regulations are. Let’s talk about crypto not having any. What do you think some of the advantages to that have been?

What is top of mind for me is the Know Your Customer, KYC. That is top of mind for a lot of people and the one point that many people can relate to. They do want to overshare information. The information does get hacked. You have breaches. Do I want to provide my identifying information to an exchange that may not have the best security protocols? The DeFis and those who do not require access to upfront personal information is one benefit that I have heard argued about time and time again. It is a value add to not having that regulatory oversight.

KYC is very interesting. I have done everything like holding up my passport next to my face with a note saying, “I am doing this on purpose,” and with my signature to give out my information. We would do that for credit cards. “Citibank’s database was hacked,” and that is it. What do you think the solution is for that?

I can see a balanced approach because I could play it both ways. For me, there are ways and a risk-based approach. To me and my compliance role, I use that phrase a lot. “What is the risk-based approach?” With many of the companies operating in this space, some are regulated by a federal regulator over the money transmission side of the crypto world.

YGA 24 | Crypto Compliance

Crypto Compliance: Even in that space of wanting less or no regulations, there are just certain things that are smart to do from a business and a risk perspective and fraud management.


They do have certain things they have to comply with. Some are not regulated but their banks require them to have some type of regulations themselves, self-imposed or a bank-imposed. Many of them will take that risk-based approach and say, “What can we do to assure the safety of our customers? Give us some assurance that we are doing business with Halle, Brandi or whomever.”

Some of the clients that we have seen will have a tiered approach for when we do require ID or maybe it is a liveness test to ensure that you are a real person and not a system hack trying to manipulate the system. There are ways that we have seen a lot of companies try to balance the approach between you being a good steward in this space and protecting the customer. For me, I do want someone stealing my identity and using it anywhere. These things happen. Even in that space of wanting less or no regulations, certain things are smart to do from a business’s risk perspective and fraud management.

I am at the place where I want all of this stuff to be mainstream because I believe that it is the future of finances.

I have been in the high-risk space a lot too. For it to be mainstream, you are going to have to see regulations that are none that will stifle the developments and the businesses but they will put safety nets and protocols in place there.

That is why it has to happen because otherwise, I do not believe that it will go mainstream and then we are going to have all kinds of issues at that point. I hang out with a lot of Bitcoin Maxis and they are so far left-leaning. They swing back around to the right. It has been very interesting to see how the extreme ends of the political and social spectrum mirror each other.

I noticed this at the beginning of COVID. Both the far left and the far right were talking about the Great Awakening. I was like, “Why are we using this woo-woo phrase? Why have we co-opted it over here?” The truth is that eventually, we are going to realize, “We are all one at the highest level. I hope we all get to that point.”

Prior to that, we are all going to realize that there is a lot more commonality, especially the extremists who feel that they are the liberty-loving people and therefore, we will take liberty at the cost of so much else. It is interesting because I am more centric as far as my desire for balance. When I talk to somebody who is on the far left, has owned Bitcoin and had been in the space for ten years, they will say, “It has to be unregulated for us to be able to be free.” I do not see a world where that is going to stay the case for much longer. Even if that is true on the highest level, I do not even know that that matters because it is not going to be what happens as we move forward. It is never going to be adopted by the mainstream so long as it is fully unregulated.

With good reason, there are a lot of people who are so bad at this or busy jumping on the bandwagon for whatever reason because they agreed that they are not able to make sensible business decisions or investment decisions. Even for the people who are doing their research and getting into it, we still have this whole concept of social hacking, rug pulls and scams. I am going to do a whole episode on that because it is so prevalent. It is about people trusting people and when people are not trustworthy. We need regulation to help address that stuff as well.

[bctt tweet=”Everyone needs to figure out what to do with crypto in a thoughtful way so that we can regulate and integrate it more into our day-to-day lives. ” via=”no”]

We will have to have good regulations to have full mass adoption. People are a little skittish, especially with everything that has happened. With the plummet of the Bitcoin prices, there has to be something that brings people together to understand that you can operate in this space safely. It will take regulations to do that.

I am hopeful that my role in the industry and others like you to have that balanced approach as well will be able to help foster thoughtful regulations and educate people who can fully understand that the purpose of the regulation should not be to shut these businesses down and not have good options for people in the US, go offshore and exchanges or platforms that you have no controls from a safety or a compliance perspective. We need those good things here for that balanced approach.

I want to talk about your journey. As women, we need to see examples of other women who have done well for themselves, whether it is in the crypto space or entrepreneurial space. I love for you to share your journey.

The first thing is that I am a wife and mother of three. I work full-time. I try to balance all of that together. Thankfully, I have had some great role models that I can also lean into some great women that have been able to balance successful work, as well as that life balance. There are times it is hard and there are times when you feel like you are not doing great, especially during COVID. You are homeschooling children and trying to work. Everything feels like it is falling apart. I have always loved the compliance space. I have complied 2004 in-house as a deputy CCO.

I was working for a financial institution. I was helping to run their compliance department. We had a chief compliance officer and I was the deputy working with him. It was a high-risk space. It was a payday lender that offered money transmission, prepaid cards and debit cards. During that time, that was the high-risk area and space to be in. We saw a lot of de-risking and losing bank accounts in the industry. We, at the time, similar to what the crypto space is going through, tried to look for thoughtful regulations and ways to say, “This is a legitimate space to be in.” We wanted to make that thoughtful.

From there, I was recruited into the consulting world in 2015, spent a couple of years at a consulting firm and then decided, “Why am I not doing this for myself?” Thankfully, I had a very supportive husband that encouraged me to start my consulting firm. That was in 2017. I met some great folks at the Bates Group. We first started talking about ways to work together, share clients and promote one another. One thing led to another and we were acquired by the Bates Group. CorCom was fully implemented into the Bates Group and their team. It has been a fabulous ride so far.

What an interesting experience to go from consulting to your company and then back into a larger entity. What do you think some of the advantages are for you at the bigger company?

For me, at the foundation, I love compliance. When the acquisition happened, I was able to give away some of my hats. Leaning on a larger organization for HR, accounting and all those things, for me, take up a lot of your bandwidth that was not truly my passion. Being part of the Bates Group, I can focus more on the client work and more on what truly makes me happy, which is why I do consider it greatly.

YGA 24 | Crypto Compliance

Crypto Compliance: For crypto to be mainstream, you’re going to have to see regulations that will not stifle the developments and the businesses but will put safety nets and protocols in place there.


In my coaching practice and I coach mostly women, we talk about this all the time. What is your superpower? Give everything else away so that you can focus on that. It is two reasons though. One of them is somebody else is going to be better at the thing that you are not so good at but that is the extra hat that you are wearing. The other reason is like, “I can focus on what I love and on joy.” Joy begets joy. The more you do what you love, the more you are attracting that as well. That makes a significant difference. I like hearing about that. That is great and very important.

I had Jules Taubman, who runs women in cryptocurrency, which are over 10,000 people on Facebook. I have been on since they were at 3,000 and watched it snowball. She was on the show and talked about the difference between men and women in the crypto space. She said, “The guy is, ‘Wen Lambo,’ and the woman is, ‘Wen College education for my kid.’” That was important. There is this bizarre thing in crypto where people change the spelling of words. They have removed most of the words. Wen Lambo means, “When will my crypto go up so much that I am able to afford a Lamborghini?” Wen college education is you get the idea.

Women are looking at crypto as a way to see financial freedom. Men are more looking about, “How can I acquire more stuff or get more toys?” I am generalizing and we have exceptions to all the rules but when you look at the crypto space, it is called a bro space for a reason. I have seen a lot of women feel like they are getting marginalized in the space because women are getting marginalized still in the world.

With a Supreme Court decision among them, we are still struggling at the doorway to the halls of power. When we are able to take back our financial freedom, that gives us so much sovereignty compared to whatever else is being created for us by the well-meaning people who think they are helping us by giving us more of those regulations. As a compliance person, what do you think about all that?

I have been one of the few women in the space for a while. I started in the crypto space in 2015. It was very male-dominated at the time. Still, you see more of the male presence. We were talking about this at the Bitcoin conference. You look around and it is mostly guys everywhere. I am not saying that that is bad.

There were about 15% women. That was what my eyeballs told me.

That is one of the reasons I was drawn to you as well. We bumped into each other and I am like, “Another woman here that looks like she is on a mission.” It was great. We connected there. It is twofold too. Part of it is educating women, getting them interested and letting them know, “This is a space that we are welcome to also.” While it has been largely male-dominated, I have to say that I have at least been welcomed by my male counterparts, different conferences and so forth.

You do see the clusters of groups but the people that I have closely worked with do appreciate the knowledge. When they do recognize these smart women in the space that have something to offer and bring to it, then that is helpful. That is why I like seeing women that are very interested in space. They bring such a value add for a different perspective. When you do have everything one-sided, you lose that full perspective from the diversity aspect of it. It is still missing but it is getting better.

[bctt tweet=”We will have to have good regulations to have full mass adoption of crypto.” via=”no”]

You made a point that is so important. It is not that the men are not welcoming. It is more that they are unaware. As women, we tend to walk around all day going, “I got missed by this thing. This guy did not allow me in here at an event like that.” The truth is that everybody is like, “You got cut off in traffic,” but not because the person in front of you hates you. Simply because they were oblivious to the fact that you were there in the first place. I give men credit for when I am standing in front of them. I have had guys be like, “What do you mean you are running Goddess of Crypto? Give me your information. I am subscribing.”

I am like, “That is great.” It is surprising to me. I see that a decent amount but it is not that they did not want to help. It is that they did not know they needed to. Most men and people are good. They want to help and participate. Men take this part of their experience for granted in a way that women cannot yet. My observation is no guy is walking around the Bitcoin conference going, “Let me see. It is about 85% men here.” They do not need to and want to. It is not on their radar. That is fine. Our Supreme Court Justice Mrs. Brown was sworn in. I am very excited about that.

There was a LinkedIn post saying, “Our 119th Supreme Court Justice was sworn in.” There was a big picture of her smiling. Somebody wrote and said, “What that does has to do with race and gender?” I wrote back and was like, “Excuse me, nobody said anything about her being Black or female.” It is interesting because everybody assumes that that is the conversation. I also said, “When it is an outlier, we can stop celebrating it. As long as we need to point out that this is the first time this thing has happened, we are going to get excited about it.”

When I first started Goddess of Crypto, I was like, “Am I going to get enough women to be interviewed? Am I going to have any problems?” No is the answer. Everybody is excited about being on the show to share with other women. There are plenty of women to interview because there are, relatively speaking, a lot of women in the space.

One thing that is very exciting to me is that all the women that have been able to connect with in the crypto space have been so supportive of one another. There is no cattiness or what you think of traditional business spaces where you have that competitive nature. We can be competitive because this is part of people’s personalities at times but it has been extremely helpful in wanting to encourage one another. That is refreshing that we can build each other up so we can support, see everyone’s successes and be encouraged by that versus using it as a downer. Use it as a way to say, “She is doing great things and I want to support her.” It lets me say that I can do great things also in space.

“If you cannot see it, you cannot be it,” is what Meghann Conter says. She runs a group called The Dames, which is for women who are at or above six figures. That was why she started the group. She said, “The women do not know but there are a lot of other women in the six figures and above space.” That is powerful to acknowledge that we need more examples like Brandi Reynolds running around going, “Look at me.” That is helpful because you have been in here for so long.

The whole space is old. Bitcoin was created in 2009. By around 2012, it was starting to be on people’s radar for the very first time. You are looking at several years since the platform existed. I love what you pointed out. I wanted to go back to when you were saying about the regulations. You were in this space in 2004 taking digital payments.

2004 for compliance. 2015 in the crypto space.

YGA 24 | Crypto Compliance

Crypto Compliance: With the plummet of the Bitcoin price, there has to be something that brings people together to understand that you can operate in this space in a safe way.


What industry was that for?

2004 is where I started in the payday lending and money transmission space.

At the time, it was so high-risk and outside of the norm. What would you say about that space in 2022?

Oddly enough, that space has settled down quite a bit, meaning that regulators do not necessarily see it as the bad and the scary, nor bank partners as much. They have gotten a lot more comfort level with that space because they do have some thoughtful regulations. There is still also a lot to be said within that industry also of ways to improve or enhance in general, from a regulatory standpoint, depending upon the discussion points and who you talk to. It has calmed down a bit as far as the scariness from a regulator and banking perspective from where it was back in 2004. To me, I see similarities in the crypto space. It takes that comfort level, letting it be here a while and seeing what is going to happen. It is going to be very similar, in my opinion.

People do not like change. New things and anything outside of your comfort zone scare you. I talk about this all the time when I coach. You hit the nail on the head for me. People need time to get used to it and then they are going to stop talking about it like it is the antichrist. There will be something new. Someone will have invented something new. They should not have closed the patent office in 1908 after all. That is a good thing. To close out, I always ask the same thing. What is one more thing that you want women to know?

I want women to know that you can do whatever you want. That sounds a little cliché but I have had a lot of role models and great support. No matter what space it is that you want to be successful in or enter into, the world is ours. We need to focus on that, have a game plan, build each other up, support one another and work hard. We can make great things happen.

The Dalai Lama said, “The world will be saved by the Western woman.” I have realized over time, especially moving into the space, that he did not mean women. He meant actual you, actual me and actual you if you are reading. Brandi, thank you so much for being here. I am super grateful to have gotten a chance to talk to you and get to know you a little bit, especially your journey with your entrepreneurial role and how you have been able to be so fluid, moving to your business and then moving back into a larger organization. That is a beautiful example for women. Thank you.

Thank you for having me. It has been a pleasure.

If you enjoyed this episode, please like it, comment and most importantly, share it with all of your mothers, girlfriends, partners, wives, daughters and besties. I will see you next time.


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About Brandi Reynolds

YGA 24 | Crypto ComplianceBrandi Reynolds has over 18 years of experience in the financial services industry which includes over eleven years serving as in-house Deputy Chief Compliance Officer. Brandi has received both the Certified Anti-Money Laundering Specialist (CAMS) and Certified Anti-Money Laundering Specialist- Audit (CAMS-Audit) certifications. Since 2015,

Brandi has served as an outsourced Chief Compliance Officer to a variety of financial institutions including eToro, Voyager Digital, and Xooa. Ms. Reynolds is often sought for her extensive experience in cryptocurrency compliance. She has delivered efficient and effective solutions in areas of compliance program development, compliance monitoring and testing, and training.

Brandi prides herself in advising companies on both the strategic side of growth and compliance as well as the intricacies of day-to-day compliance. Brandi’s background includes a combination of both anti-money laundering as well as consumer protection compliance.