March 2026 Compliance & Risk Newsletter
- dmwadvisoryllc
- Apr 8
- 4 min read
Welcome to the DMW Advisory LLC March 2026 Newsletter. This period has been marked by significant shifts in the regulatory environment, particularly regarding digital assets, border security, and whistleblower incentives. Below, we summarize the key updates your institution needs to navigate the evolving landscape.
Heightened global focus on AML/CFT deficiencies
Increased scrutiny on real estate transactions near the Southwest border
Continued expansion of U.S. sanctions programs
Clearer regulatory posture on crypto assets
Emphasis on innovation‑aligned supervision
Strengthening of whistleblower incentives and protections
FATF Identifies AML/CFT Deficient Jurisdictions
On March 6, FATF released its updated list of jurisdictions under increased monitoring, identifying countries with strategic AML/CFT weaknesses. Following its February 2026 Plenary, FATF updated its global "Gray List" and "Black List."
Gray List Changes: Kuwait and Papua New Guinea have been added to the list of Jurisdictions Under Increased Monitoring.
Black List Reminders: Iran, North Korea, and Burma remain on the High-Risk list. FinCEN reminded U.S. institutions of the "maximum pressure" campaign on Iran and the necessity of strict countermeasures.
Institutions should apply enhanced due diligence when engaging with entities operating in or through these regions. Source
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FinCEN Expands Southwest Border GTO
On March 10, FinCEN issued an expanded Geographic Targeting Order requiring title insurance companies to collect and report information on certain real estate transactions near the Southwest border. The expansion reflects FinCEN’s continued focus on real estate as a channel for illicit finance. The order covers geographic locations in Arizona, California, New Mexico, and Texas
Expanded Reach: The GTO now includes additional counties in New Mexico (Bernalillo, Doña Ana, San Juan)and Arizona (Maricopa, Pima).
Requirement: Certain Money Services Businesses (MSBs) in these areas must report cash transactions between $1,000 and $10,000. This is a critical tool in the administration’s goal to disrupt the financial networks of fentanyl traffickers.
The terms of this GTO are effective March 7, 2026, through September 2, 2026. The GTO provides a 30-day compliance period for MSBs that were not required to report under the September 2025 version of the GTO, which will not need to begin filing reports until April 6, 2026. For all MSBs required to report under the GTO, the filing deadline is extended from the standard 15 days for Currency Transaction Reports to 30 days, for the entire period of the GTO. Source
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FinCEN Proposes Rule to Pay Whistleblowers
On March 30, FinCEN issued a Notice of Proposed Rulemaking to implement its whistleblower program, offering awards of 10–30% of monetary penalties for individuals providing original information leading to enforcement actions for fraud-related violations of BSA, sanctions violations or several other laws critical to safeguarding the U.S. financial system and national security. The proposal includes anti‑retaliation protections.
Call to Action: Financial institutions should ensure their internal reporting mechanisms and "culture of compliance" are robust to address potential issues internally, potentially reviewing their current whistleblower programs and means of reporting. Source
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OFAC Issues New Sanctions Guidance
In March, OFAC published updated sanctions guidance and enforcement materials, including new designations and compliance expectations. Organizations should ensure sanctions screening tools and internal controls reflect the latest updates.
OFAC released further sanctions‑related updates, including new designations and compliance expectations for U.S. and global entities. Continuous monitoring remains essential. OFAC released updated guidance and brochures (including the "Sanctions Compliance for the Virtual Currency Industry" and "OFAC Reporting and License Application" guides).
Focus: The updates emphasize the importance of real-time screening and the risks associated with "nesting" in foreign correspondent accounts. Institutions are encouraged to use the updated self-assessment tools to evaluate their sanctions risk appetite.
SEC Clarifies Securities Laws for Crypto Assets
On March 17, the SEC issued a statement clarifying how federal securities laws apply to crypto assets, reaffirming that many digital tokens may fall under existing securities frameworks. Firms should reassess registration, disclosure, and investor‑protection obligations. In a landmark move, the SEC and CFTC issued a joint interpretation clarifying the application of federal securities laws to crypto assets.
Key Insight: The interpretation establishes a "Token Taxonomy" for digital commodities, collectibles, and stablecoins. Addresses how a “non-security crypto asset”, which is a crypto asset that itself is not a security, may become subject to, and how it may cease to be subject to, an investment contract.
Clarifies the application of federal securities laws to airdrops, protocol mining, protocol staking, and the wrapping of a non-security crypto asset.
Significance: SEC and CFTC are taking a joint approach to work on bipartisan market structure legislation. Source
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FDIC on Innovation & Regulatory Agility
On March 26, in a recent speech, the FDIC emphasized the need for regulators to modernize supervisory approaches to keep pace with rapid technological innovation. The agency highlighted digital‑risk oversight and industry collaboration as key priorities. FDIC Director testified before Congress regarding the agency’s approach to emerging technology. Human oversight was emphasized to validate AI-generated content and decisions.
AI Adoption: The FDIC is encouraging banks to adopt AI and Generative AI for fraud detection and AML/CFT processes, provided they maintain "technology-neutral" risk management.
Internal Modernization: The FDIC is piloting GenAI tools for its own workforce to streamline supervisory processes, signaling that regulators are becoming as tech-savvy as the institutions they oversee. Source
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