(Bloomberg) — MoonPay, a startup that allows customers to purchase crypto with a credit card, named James Freis as special adviser for global regulatory compliance. Freis previously served as chief executive officer of Wirecard, where he determined massive fraud had taken place at the German payments processor.
Freis was also the director of the Financial Crimes Enforcement Network under former Presidents George W. Bush and Barack Obama. He served as a chief compliance officer at German stock exchange services company Deutsche Börse Group before joining Wirecard as a management board member and chief compliance officer in 2020.
On his first day at Wirecard, Freis received documents that showed the company was fabricating assets and revenue, he told Bloomberg in an interview. He quickly alerted the Board of Directors, which fired CEO Markus Braun and named Freis as his successor. Wirecard acknowledged that 1.9 billion euros ($2.1 billion) it had listed as assets probably didn’t exist and eventually filed for bankruptcy, causing Germany’s biggest corporate scandal.
After leaving Wirecard at the end of 2020, Freis launched his own startup, CRINDATA, which is building a software program for operational risk management at financial institutions. He joined MoonPay as a special adviser because he liked how the company takes a proactive approach with regulators and obtains licenses for products it hasn’t even rolled out yet.
“That’s a lot different from others who will try to avoid the regulatory framework,” he said.
The relationship between regulators and crypto companies has been rocky at times, with Securities and Exchange Commission Chair Gary Gensler often equating the digital currency landscape with the “Wild West.” The SEC even butted heads with Coinbase Global Inc. after the regulator threatened to sue the crypto exchange if it released a lending product that could be considered to involve a security.
Freis said he will guide MoonPay as the crypto industry gains more regulatory clarity. He called President Joe Biden’s recent executive order, which called for a greater focus on digital assets from government agencies, a “good step” in that direction.
Freis is helping MoonPay manage international tensions as well. MoonPay shut down access to Russian customers because of sanctions stemming from the conflict in Ukraine, and checks all clients against sanctions lists during its know-your-customer procedures.
Freis also has experience advising companies that are going public, but said it’s too early to say whether MoonPay, which raised $555 million in a funding round with Tiger Global Management and Coatue Management in November, will go public anytime soon.
“They are both a profitable company and had very successful fundraising in the fall, so there’s no need for that now,” he said.
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