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Dublin to grow as crypto hub as regs enforced

The white-collar crime landscape has seen the introduction of a swathe of regulations and legislation intended to increase compliance and enforcement, Matheson lawyers have said.

Enhanced powers to monitor, detect and prosecute white-collar and corporate offences were now in the hands of regulators, bringing an increased focus on compliance to board agendas, the firm said.

Breaches

The Corporate Enforcement Authority (CEA), established in July 1922, will investigate and prosecute breaches of Irish company law, replacing the former Office of the Director of Corporate Enforcement (ODCE).

The statutory functions of the CEA are similar to its predecessor, though it now operates as an independent agency, with extra funding and enhanced legislation expected in due course.

The CEA has already brought a number of prosecutions throughout 2023 (notably against individuals rather than companies), including:

• Prosecuting a former director of a property-management company, following an investigation into allegations of fraudulently removing company property in the period immediately preceding the company being wound up,
• Prosecuting, in co-operation with the Irish Data Protection Commission, a former director for offences relating to the provision of false information to an electronic filing agent,
• An ongoing investigation into the Football Association of Ireland.

The chief executive has signalled that the CEA will increase its investigations, likely resulting in further prosecutions.

While the Director of Public Prosecutions is the authority responsible for prosecuting the most serious criminal offences on indictment, most Irish regulators have the power to investigate and prosecute summary offences within their remit.

Some regulators, such as the Environmental Protection Agency and the Health and Safety Authority, have a busier track record.

Matheson has said that it detects an increase in prosecutions and enforcement activity from other regulators, such as: 

• The DPC successfully prosecuted a number of companies for breaching rules on direct marketing throughout 2022-2023,
• The Central Bank of Ireland (CBI) has power to prosecute summary offences for breaches of financial-services legislation and regulation. In October 2023, a businessman pleaded guilty to the offence of insider dealing, following a referral from the CBI to the Garda National Economic Crime Bureau.

Matheson lawyers say that the continued, increasing regulation of technology imposes an additional risk of liability to criminal sanction and enforcement both for companies and directors across all industry sectors.

Corruption risk

As well as fraud and corruption risk, AI, content regulation, data privacy and cyber-attacks are recurring agenda items for corporate boards.

The recent enactment of the Online Safety and Media Regulation Act 2022 marks the arrival of a new regulator, Comisiúin na Meán, responsible for overseeing compliance with regulations including under the EU Digital Services Act for broadcasting providers, video-on-demand providers and video-sharing platforms.

The act has introduced requirements on in-scope entities to monitor and combat harmful and/or illegal online content.

Comisiúin na Meán can also prosecute certain summary offences that carry a penalty of up to a €5,000 fine and/or 12 months' imprisonment.

A marked increase in sophisticated and paralysing cyber  and ransomware attacks is consistent with global trends, and incident response will remain a board priority.

The Central Bank Individual Accountability Framework Act 2023, enacted on 9 March last, introduces significant regulatory reform with the ultimate objective of driving improved governance and accountability in financial services.

Tool

The CBI's key enforcement tool, the Administrative Sanctions Procedure, has been enhanced, and it can now take enforcement action directly against an individual for breaches of their obligations.

Finally, the new Markets in Crypto Assets Regulation (MICAR) will come into force in Ireland in 2024 and will increase the level of regulation of the crypto-asset industry in Europe. 

A number of large crypto-exchanges have chosen Ireland as their regulatory hub, and Matheson expects to see this industry grow, which will bring with it increased compliance and enforcement activity from the CBI as the national competent authority under MICAR.