Foreign Military Sales restrictions
Foreign Military Sales restrictions are an underappreciated compliance pressure point for Financial & Capital Markets firms, particularly those financing defense-adjacent transactions, underwriting sovereign debt for restricted counterparties, or providing correspondent banking to entities in the U.S. Department of State's FMS review scope. The U.S. Department of the Treasury's Office of Foreign Assets Control and the U.S. Department of State's Directorate of Defense Trade Controls both assert authority here, and their jurisdictions overlap in ways that create real exposure for capital markets desks that assume FMS is a defense-sector problem. Cresthaven is actively monitoring this intersection for regulatory actions, guidance updates, and enforcement patterns as they emerge.
Watch
- DDTC guidance on financial intermediaries facilitating FMS-adjacent transactions
- OFAC secondary sanctions designations affecting sovereign debt underwriting eligibility
- Congressional holds on FMS approvals that could trigger counterparty review obligations
- State Department FMS eligibility list changes touching APAC sovereign borrowers
Recent material activity in Financial & Capital Markets
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SEC enforcement action against crypto lending platform for unregistered securities offering
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CFTC and SEC release joint statement on digital asset classification framework
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Federal Reserve announces enhanced supervisory expectations for banks with crypto asset exposure
The Board of Governors issued SR 26-4 establishing new supervisory expectations for state member banks engaging in crypto-related activities. Banks must now maintain dedicated risk management frameworks, capital reserves…
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SEC approves spot Ethereum ETF amendments allowing staking yield pass-through
The Commission approved amendments to existing spot Ethereum ETF registration statements permitting the pass-through of staking rewards to fund shareholders. The approval includes enhanced disclosure requirements and a 3…
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SEC Division of Examinations publishes 2026 priorities: crypto compliance tops the list
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FINRA proposes new rules for broker-dealer crypto custody and customer protection
FINRA filed a proposed rule change establishing custody requirements for broker-dealers holding crypto assets on behalf of customers. The proposal requires segregated wallets, proof-of-reserves attestations, and $10M min…
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Federal Reserve Board publishes research paper on CBDC impact on commercial bank deposits
The Board published a staff research paper modeling the potential displacement of commercial bank deposits by a retail CBDC. The paper estimates 8-12% deposit migration in the first two years, with disproportionate impac…
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