Weekly Focus:

  • Jay Clayton to step down as Chairman of the Securities and Exchange Commission
  • Brian Brooks nominated to five-year term as Comptroller of Currency
  • Origin Protocol attacked, resulting in estimated loss of $7 million
  • SEC issues no-action letter for IMVU
  • Mitsubishi UFJ Financial Group plans launch of blockchain payments network in 2021
  • Texas State Securities Board files emergency cease-and-desist orders against ten digital asset investment platforms

Continue Reading Blockchain Week in Review: Week of November 20, 2020

Perkins Coie is pleased to announce that it has obtained no-action relief from the Securities and Exchange Commission Staff that clears the way for its client IMVU Inc., to sell VCOIN, a blockchain-based digital asset, as a transferable non-security to its users worldwide.

IMVU is the world’s largest avatar-based social platform with a global network of over 7 million monthly active users. These users create 3D avatars to meet new friends, interact, and play games in virtual environments online and through IMVU’s app.

“We are thrilled the SEC staff has granted IMVU’s request for relief in connection with IMVU’s sale of its new blockchain-based digital asset, VCOIN,” said Michael Didiuk, an investment management and blockchain technology and digital currency partner in Perkins Coie’s New York office. “This is the first SEC staff no-action letter involving a blockchain-based digital asset that can be transferred outside of a closed platform and exchanged for fiat currency. With these important features, VCOIN is a new way for IMVU’s users to earn value that can be converted into cash and used in the real world.”

The Perkins Coie team that represented IMVU before the SEC Staff included Michael Didiuk; Joshua Boehm, a technology transactions and privacy law counsel in Perkins Coie’s Phoenix office; and Michael Selig, a technology transactions and privacy law associate in the firm’s New York office.

SEC – Response of the Division of Corporate Finance can be found here.

Our letter on behalf of IMVU, Inc. can be found here.

Weekly Focus:

  • DOJ Seizes More Than $1 Billion in Cryptocurrency from Silk Road Hacker
  • CFTC Announces Charges Against Digital Asset Ponzi Scheme
  • SEC’s Enforcement Division Collected $4.68 Billion in 2020
  • Vortex Blockchain Technologies Settles with the SEC
  • Blockchain Industry Speculates on Regulation in a Biden Administration
  • LabCFTC Announces Agenda for Empower Innovation 2020
  • Cred Inc. Files for Chapter 11 in Delaware
  • Deutsche Bank Publishes Report on CBDC
  • Reserve Bank of Australia Partners with Blockchain Company on CBDC Project
  • Lebanon’s Central Bank Progresses on Plans for CBDC
  • Russian Central Bank Issues CBDC Consultation Paper
  • Bank of Canada Is Working with G7 on Global Approach to Digital Currencies
  • The U.K. Treasury Announces Plans to Regulate Stablecoins
  • Germany Drafts Bill for Blockchain-Based Securities

Continue Reading Blockchain Week in Review: Week of November 13, 2020

Weekly Focus:

  • Kik & SEC Agree to $5M Judgment
  • CFTC Releases Advisory on Futures Commission Merchants
  • New York “Techsprint” Focuses on Virtual Currency Companies
  • Powell Considers U.S. Digital Dollar at IMF Virtual Panel
  • Ripple Considers Leaving U.S. over Lack of Regulatory Clarity
  • New Jersey “Digital Asset and Blockchain Technology Act” Moves Forward in State Legislature
  • IMF Issues New Report on CBDCs and GSCs
  • The Bahamas Rolls Out First CBDC, the “Sand Dollar”
  • Bank of Spain Releases CBDC Research Plan

Continue Reading Blockchain Week in Review: Week of October 23, 2020

Blockchain Unconference – by the WTIA Cascadia Blockchain Council

Free to register: https://www.eventbrite.com/e/blockchain-unconference-tickets-114448921806

October 14, 2020 9:00 am – 1:30 pm

Valerie Dahiya and Lowell Ness present “Tokenized Securities” – which can be viewed below:

 

Counsel Sarah Shtylman will be a part of the The Block Presents: DeFi and The Law – A round table discussion with crypto’s leading lawyers

Link to register: https://app.livestorm.co/the-block/the-block-presents-defi-and-the-law-a-round-table-discussion-with-cryptos-leading-lawyers

10/13 – 9:00 am Pacific/12:00 pm Eastern

Live stream panel titled Can Privacy-Preserving Cryptocurrencies and Regulation Co-exist?

Join Electric Coin Co and a panel of experts to learn more about the compatibility of privacy, cryptocurrencies and existing regulation.

Panelists:

Yusuf Hussain, Head of Risk, Gemini

Dana Syracuse, Partner, Perkins Coie

Jack Gavigan, Regulatory Relations, ECC

The panel will be moderated by Maria Filipakis, managing partner of Topside LLC and former Executive Deputy Superintendent of the Capital Markets Division at the New York State Department of Financial Services.

The conversation will cover Gemini’s announcement of Zcash shielded support (https://gemini.com/blog/youre-one-ste…), Perkins Coie’s recent paper on AML regulation privacy-enabling cryptocurrencies (https://www.perkinscoie.com/en/news-i…), and how regulators and the industry evaluate risks and controls.

More information: https://electriccoin.co/event/can-privacy-preserving-cryptocurrency-and-regulation-coexist/

See below to view:

Weekly Focus

  • CFTC and DOJ Actions Involving BitMEX
  • SEC Settlement with Salt Lending
  • CFTC Action Against PaxForex
  • Summary Judgment Granted in SEC Action Against Kik
  • FinCEN and OFAC Issue Advisories on Ransomware
  • FinCEN Director Blanco Speech at ACAMS AML Conference
  • French Authorities Investigate Use of Virtual Currency to Fund Terrorism

Continue Reading Blockchain Week in Review: Week of October 2, 2020

Part of Future Industry Association’s (FIA) L&C Division Webinar Series

Join the FIA Law & Compliance Division on 22 October for a webinar regarding virtual currency transactions. The CFTC recently finalized its interpretive guidance on what qualifies as “actual delivery” of virtual currency for purposes of the Commodity Exchange Act’s retail commodity transaction definition. In this webinar, we will: 1) consider what types of arrangements result in actual delivery consistent with the guidance; and 2) discuss recent CFTC enforcement actions involving illegal off-exchange retail commodity transactions.

Date & Time: Thursday, 22 October 2020 | 10:00 a.m. – 11.00 a.m. ET

Moderator:

  • Natalie Tynan, Associate General Counsel and Head of Technology Documentation Strategy, FIA

Presenters:

The staff (“Staff”) of the Division of Trading and Markets of the U.S. Securities and Exchange Commission (SEC) issued a no-action letter (NAL) at the request of the Financial Industry Regulatory Authority (FINRA) on September 25, 2020, which built upon a joint statement (“Joint Statement”) issued by the staffs of the SEC and FINRA in 2019 (please see our prior client update for additional discussion of this 2019 guidance). As part of its guidance, the Joint Statement provided an example of a noncustodial business model for broker-dealers that involved the operation of an alternative trading system (ATS). Upon a request by FINRA on behalf of its broker-dealer members, the NAL provides modified relief for ATSs that meet certain conditions, enabling them to settle digital asset security trades under a slightly modified structure designed to reduce operational and settlement risks. Continue Reading SEC Staff Provides Relief on the Role of ATSs in the Settlement of Digital Asset Security Trades