ErisX Spotlight: Nataliya Manina, Chief Compliance and Regulatory Officer, and Senior Counsel
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“The team at ErisX is unique in that it has capital markets expertise but also an innovative spirit and entrepreneurial mindset,” said Nataliya Manina, ErisX’s new Chief Compliance and Regulatory Officer and Senior Counsel. “I am excited by the opportunity to work with like-minded people and build something new and groundbreaking.”
Nataliya joined ErisX in October 2020 to oversee the compliance and regulatory function at the Exchange and Clearinghouse, and contribute her legal expertise to ErisX’s ambitious commercial efforts. We sat down with her to talk about her jump from derivatives into crypto and crypto derivatives, why regulation is important, and how regulated markets best protect member funds.
Nataliya was first enticed by the crypto industry when it hit mainstream in 2016.
“We were talking about crypto at Futures Industry Association (FIA) conferences and hearing about it on financial news channels. It was around [2016] that I started reading up on blockchain technology and the legal and regulatory implications of cryptocurrencies.”
Nataliya took the leap into crypto in July 2019 joining Drawbridge Lending. As the Managing Director in Legal and Compliance, she oversaw the lending institution’s compliance program as it leveraged bitcoin as collateral for loans.
“I view Bitcoin, and other cryptocurrencies, as simply another type of financial asset. However, properties such as pseudonymity can make it difficult to directly link transactions to identities. While this is a desirable characteristic in the appropriate context, it can create opportunities for bad actors and that’s why for any regulated cryptocurrency exchange a robust AML/KYC program is a must,” added Nataliya.
In addition to a strong compliance program, Nataliya also believes that guidance from regulators will drive healthy growth in the crypto industry.
“ErisX’s strong compliance and AML/KYC program and exchange rules that govern prohibited market behaviors, gave me confidence about its ability and commitment to responsible, above board operations. Recent guidance from regulators, driven by input and encouragement makes trading digital assets secure and offers an opportunity to diversify one’s traditional portfolio.”
She continued to stress the importance of regulation and a surveilled crypto marketplace. She referred to situations where investors were unable to access their crypto assets, including what happened at Cred and OKEx , as well as older cases such as QuadrigaCX.
“You can’t have an owner of an exchange die and take all the private keys to the exchange’s crypto wallet with him,” she said. “Under the jurisdiction of the Commodity Futures Trading Commission (CFTC), ErisX follows CFTC core principles that protect market users and the public from fraud, require implementation of a strong system safeguards program, while also fostering open, competitive and financially sound markets.”
Nataliya also brought up the importance of segregated funds, “The CFTC and the individual U.S. states, through rules applicable to licensed money transmitters, require ErisX to segregate funds and hold them separate from the funds of ErisX.”
Nataliya explained that market manipulation issues such as wash trading, spoofing and layering are the same in crypto markets as they are in the futures markets, however there are characteristics that make crypto markets unique. “For our spot market, experienced surveillance staff use sophisticated monitoring and analytic tools not available in traditional markets to account for distinctive features of virtual currencies, she said. (For more information about ErisX’s surveillance program and the unique characteristics of the crypto markets, we invite you to read this blog.)
As crypto continues to gain momentum with a variety of market participants, ErisX is applying the traditional capital markets regulatory structure to the nascent crypto landscape. Natalyia’s background in derivatives law enhances ErisX’s efforts in providing a secure and transparent marketplace without sacrificing market surveillance.
Nataliya Manina joined ErisX in October 2020. She came to the Exchange most recently from UBS where she was an Associate General Counsel of Derivatives and Trading. Previously she worked at Drawbridge Lending, G. H. Financials, LLC, the National Futures Association and the Chicago Mercantile Exchange in compliance and surveillance-type roles. Nataliya is a licensed attorney in New York and Illinois and a CPA, and has experience working with the CFTC and state-licensing regimes.
