A transactional lawyer turned financial regulation specialist, Cathrine Foldberg Møller has established herself in recent years as one of the central figures in regulatory advice in Luxembourg, particularly on fintech and crypto topics. “What I’ve done so far is everything we call ‘financial services regulatory’. The field is quite broad in Luxembourg because the financial sector covers everything, but for the past two years there has been a special focus on everything fintech and crypto, particularly with Mica, with all the players who want to set up in Luxembourg,” she explains, as she moves from Simmons&Simmons to DLA Piper.

In addition to her consultancy work, the Dane is also involved in several key bodies in the financial centre: vice-chairwoman of the board of the Luxembourg Capital Markets Association, she is involved in discussions on the development of Luxembourg’s capital markets and she also chairs a working group of the Luxembourg Sustainable Finance Initiative, dedicated to innovation and investment products for retail clients, a subject she links directly to the regulatory transformations underway at European level.

At DLA Piper, in this sort of “stand alone” role as she calls it, she will mainly be assisting international or European players with their authorisation applications to the CSSF, whether they be crypto-asset service providers, payments players or hybrid structures. “These include licence applications to the CSSF, foreign or European players who will need a licence to provide crypto-related services.”

For the practitioner of regulatory dialogue, Luxembourg’s attractiveness is not just down to its regulatory framework harmonised by European texts. It is also based, in very concrete terms, on the relationship with the supervisor. “The advantage of Luxembourg is the CSSF! They are very business friendly, proactive, you can call them. It’s very rare to have such a relationship with the competent authority. And that’s not just true for me as a lawyer, but also for my clients. During the licence application process, but also afterwards, having a dedicated contact person who knows the teams and the business is a real advantage.” Is this self-serving diplomacy? “No,” she says firmly. This proximity does, however, require a constant effort to educate and build trust. “Sometimes I call the CSSF several times a day to get things moving. But if we have a good understanding, it works very well. There’s no point in being aggressive.”

Strict due diligence required

While Cathrine Foldberg Møller is now identified as a specialist in crypto-regulation, her interest in these subjects goes beyond the legal framework. “I always try to be part of the client’s team, to understand the services they offer, the technical aspects, the business, the operational aspects. The law says one thing, but you have to understand what’s behind it.” To bridge the gap between law and technology, she has trained herself. “In 2021, I took a course at MIT on artificial intelligence and its implications for business strategy. It wasn’t focused on law or finance at all, but on medicine and autonomous vehicles. It was very useful for me, particularly in terms of vocabulary, which is sometimes lacking in the world of lawyers.”

On the world of crypto-assets, the CSSF licensing specialist takes a pragmatic view. “Even when the sector is regulated, even when companies have licences just about everywhere on the planet, it is still a world that can appear opaque. There are a lot of players who take advantage of the noise on social networks to make people believe that they are selling tokens that will make people rich. When you take an in-depth look at the documents published at the time of the launch, you start to see the problems.”

Faced with these risks, customer screening is central. “As a firm, we have to carry out very strict due diligence. Reputation plays a huge role. We’ve had to turn down some clients, particularly because of the risk of money laundering. You have to understand the product and the client very well to make sure you don’t get involved in stories that aren’t healthy.”

The substance today... and tomorrow

Another key point in obtaining a licence remains the question of the substance. “You can’t launch a business in Luxembourg without a real team on the ground. It’s not specific to crypto, it’s true for the whole financial sector. What I always tell clients right from the start is that it’s not enough to have ideas. You need people to run the business here.” The regulations deliberately leave some room for discretion. “The law doesn’t say much. The CSSF often tells us that it’s a case-by-case analysis. That’s not very helpful, but it’s the reality. Two licences involve more substance than one, and you also have to look at the development over time, the business plan, future recruitment.”

Committed to the issues of sustainable finance and retail investor protection, the chairwoman of an LSFI working group warns against certain regulatory illusions. “Simplification can be extremely dangerous. If you amend one directive without looking at the impact on five others, you create uncertainty. You add a layer of complexity for years before, perhaps, you end up with something simpler.”

His choice to join DLA Piper is part of this long-term reading. “The regulatory field has become a stand-alone area. There aren’t many firms in Luxembourg with a truly dedicated practice. That was already my business case for becoming a partner. There is a real need in the marketplace, and DLA Piper is very happy to be able to develop this practice with someone recognised for it.”

Far from the sometimes austere image associated with regulatory law, the ex-transactionalist turned regulatory specialist claims a profession on the move. “It’s a real lawyer’s job: reading the texts, interpreting them, applying them to concrete business models. And these days, things move very fast. Regulatory work has become almost as fast-paced as transactional work.”

In his view, this is precisely where the future of the Luxembourg financial centre lies: in its ability to combine regulatory requirements, dialogue with the supervisor and a keen understanding of emerging business models. “This is the only way innovation can develop in a responsible and sustainable way.”