January 2026 Newsletter

January 2026 Newsletter

FinCEN Delays Adviser AML Rule to 2028

On January 2, 2026, FinCEN issued a Final Rule extending the compliance deadline for the Investment Adviser AML/CFT Rule from January 1, 2026 to January 1, 2028. The two-year delay applies to RIAs and ERAs, allowing FinCEN to reassess the rule’s scope, refine its requirements, and align it with the proposed CIP framework. While providing near-term regulatory relief, the move signals potential substantive revisions ahead. [1]

LYODS INSIGHTS: Lyodssoft views the delay not as a pause, but as a strategic grace period. FinCEN’s extension to 2028 reflects the complexity of applying bank-style AML rules to private funds, particularly in stablecoins and digital assets. The focus now shifts to governance and risk assessment, giving firms time to address challenges such as on-chain settlement monitoring and unhosted wallet verification. FinCEN is likely to return with more prescriptive crypto-asset requirements, making early “Pre-Compliance Audits” and stablecoin AML testing a way to convert regulatory delay into institutional trust and competitive advantage.

A picture shown a funnel at the centre of the image, wtih a lock nearby. This is a symbolic meaning to echo the news on January 2, 2026, which FinCEN issued a Final Rule extending the compliance deadline for the Investment Adviser AML/CFT Rule from January 1, 2026 to January 1, 2028. The two-year delay applies to RIAs and ERAs, allowing FinCEN to reassess the rule’s scope, refine its requirements, and align it with the proposed CIP framework. While providing near-term regulatory relief, the move signals potential substantive revisions ahead.

Fake ID eMPF eKYC Case: HK$1.8M Stolen

A Hong Kong criminal syndicate used high-quality fake ID cards to exploit the eMPF platform’s electronic KYC (eKYC) process, open fraudulent eMPF and bank accounts, and steal about HK$1.8 million from three MPF members’ pension savings. In response, the eMPF Platform Company suspended eKYC registration, required additional identity checks for withdrawals, fully restored affected members’ fund balances, and launched a comprehensive review of authentication and anti-counterfeiting measures with regulators and law enforcement [2]

LYODS INSIGHTS: key takeaways for banking and finance compliance:


  • eKYC controls must be treated as high-risk infrastructure, rigorously tested against forged documents and synthetic identities.
  • Stronger multi-factor and government-backed digital IDs should supplement biometric and document checks.
  • Clear refund, incident response, and customer communication frameworks are essential to maintain trust after fraud events

The picture show a shield with human face on it, on a background of digital world representing a check human identity. This is to use for echo the news about a Hong Kong criminal syndicate used high-quality fake ID cards to exploit the eMPF platform’s electronic KYC (eKYC) process, open fraudulent eMPF and bank accounts, and steal three MPF members’ pension savings.

2026 Financial Inspection Priorities for FIs and VASPs

Taiwan’s Financial Supervisory Commission announced its 2026 financial inspection priorities, focusing on anti-fraud, anti–money laundering, consumer protection, and cybersecurity resilience. In addition to banks, insurers, and securities firms, nine registered virtual asset service providers (VASPs) will be included in inspections, with enhanced oversight of abnormal transactions, AML controls, asset segregation, and cloud and information security to safeguard financial system stability. [3]

LYODS INSIGHTS: For Lyods, this underscores increasing market need for integrated AML systems that support abnormal transaction detection, customer due diligence, asset segregation oversight, and regulatory-ready reporting aligned with evolving supervisory expectations.

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Japan 2026: The Institutional Crypto Pivot

2026 marks a pivotal shift for Japan as it establishes a sophisticated institutional investment framework. Key legislative milestones, including separate taxation and the anticipated launch of crypto asset ETFs, are set to finalize a robust market environment.

While macroeconomic volatility persists—driven by BoJ and Fed monetary policy shifts—investors are focusing on quarterly economic outlooks for stability. Simultaneously, Japan Fintech Week will highlight the transition of stablecoins and Real-World Assets (RWA) from pilot programs to full-scale commercialization. This convergence of regulatory clarity and technical innovation positions Japan as a leader in the next phase of global digital finance. [4]

LYODS INSIGHTS: As Japan’s financial landscape matures, security responsibility is shifting toward underlying technology. Commercial-scale digital assets demand proactive, AI-driven risk mitigation over reactive screening.

We see 2026 as the year RegTech becomes integral to the investment experience. Through automated transaction monitoring and strong identity verification, we deliver the trust layer that enables institutional innovation to scale securely—defined by resilience, not just growth.

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