Dana Syracuse Speaks at The DC Blockchain Summit 2017

Through our longstanding relationship with The Chamber of Digital Commerce, Dana Syracuse presented a blockchain legal and regulatory update at the DC Blockchain Summit held in Washington DC,  March 15-16, 2017. View Dana’s presentation here.

The Chamber of Digital Commerce, along with Georgetown University’s Center for Financial Markets and Policy, hosted this second annual gathering featuring the best and brightest in industry and government from around the globe. The program included discussions from the people, companies and government leaders who are driving digital assets, blockchain and distributed ledger technologies forward. Conference highlights can be found here.

As Fintech Platforms Grow Up, Investment Management Firms Face the ‘Problems of Tomorrow’

Read our new article in The Investment Lawyer to learn more about the legal and regulatory implications of emerging technologies, including blockchain and digital ledger technology, investing in fintech companies, robo-advisers and algorithms, and cybersecurity.

SEC Denies Proposed Rule Change

The Securities and Exchange Commission announced today that it would deny a proposed rule change that would have permitted the first exchange traded fund to track digital currency.  If granted it would have permitted the Bats BZX Exchange, Inc. (“Exchange”) to list and trade shares issued by the Winklevoss Bitcoin Trust on the Exchange.  The SEC found that the proposed rule change was inconsistent with the Securities Exchange Act of 1934 as the Exchange would be unable to enter into the necessary surveillance sharing agreements given that many digital currency exchanges are located overseas and largely unregulated.  Notably, the reasons for the disapproval do not appear to be related to the specifics of the filing, but rather to larger concerns about the unregulated nature of bitcoin.  The SEC did indicate that it might consider similar applications in the future stating: “[t]he Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop.”

 

Blockchain Week in Review – February 17, 2017

Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest.

U.S. Developments

California and New York Take Divergent Approaches to Regulating Fintech

After the OCC began developing bank charters for fintech firms, California’s financial regulator sent a letter to 13 fintech companies seeking a “frank, constructive dialogue” on ways to improve on “the lack of consistency and certainty in the current state regulatory regime.” For more information, please visit our sister blog The Fintech Report. Continue Reading

Blockchain Week in Review – February 10, 2017

Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest.

U.S. Developments

Arizona Bill Seeks to Recognize Validity of Smart Contracts and Blockchain Records

A bill introduced in Arizona seeks to legally recognize smart contracts, digital signatures, and other blockchain records.  Arizona House Bill 2417 proposes to define blockchain technology as “distributed ledger technology that uses a distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless.  The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth.”  The bill is sponsored by Rep. Jeff Weninger.

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Blockchain Week in Review – February 3, 2017

Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest.

U.S. Developments

The Saga of Coinbase and its IRS John Doe Summons Continues
In November 2016 with approval from a federal court, the IRS served a John Doe summons on Coinbase requesting information on its users from January 1, 2013 through December 31, 2015 reportedly to catch individuals using crypto currency to evade taxes.  In an effort to work with the IRS without disclosing an overly broad amount of private customer information, Coinbase suggested an alternative solution:  issuing 1099-B reports, which brokerage firms use to report customers’ gains and losses.  The issue remains unresolved.  See Laura Shin, Forbes.com, http://www.forbes.com/.

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NYDFS Issues Revised Proposed Cybersecurity Regulation

On December 28, 2016, the New York State Department of Financial Services (NYDFS) issued a revised proposed cybersecurity regulation, Cybersecurity Requirements for Financial Services Companies.  The revised proposed regulation reflects several substantive changes made in response to over 150 public comments received by NYDFS in response to the original proposed regulation published this past September.  These regulations represent the culmination of NYDFS’s multiyear inquiry into the efforts of banking institutions and insurance companies to prevent cybercrime, which included an extensive assessment and review of NYDFS-regulated banks, NYDFS-regulated insurance companies, and third-party vendors.  NYDFS is accepting further comments to the proposed regulation through January 27, 2017.

Much like the version proposed in September, the revised regulation is designed to set certain minimum cybersecurity standards and processes to be followed by regulated institutions.  We have summarized below the key obligations that the regulations would impose, along with their effective dates, if they are implemented in their current form.

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