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.
US Office of Comptroller to Examine Distributed Ledgers in FinTech Framework
US Office of Comptroller (OCC) released a white paper on responsible financial technology innovation. The white paper proposes an approach to handle how banking institutions experiment with new technologies, such as the blockchain. Comptroller Thomas J. Curry stated that the OCC is creating a framework to examine FinTech innovations, and that it is considering the creation of an internal office dedicated to monitoring FinTech developments. The OCC wants all banks to “take a measured, risk-based approach to new financial technologies.” – Coindesk.com
The white paper includes guiding principles for the OCC’s approach to Responsible Innovation, and requests responses to a list of questions by May 31, 2016.
CFTC Commissioner Wants Agency to Revisit CFTC Regulations
Commissioner J Christopher Giancario of the Commodity Futures Trading Commission (CFTC) stated that the agency should reexamine CFTC regulations. In particular, he cited CFTC regulation 1.31, which relates to rules for keeping and inspecting books and records. The regulation mandates “the storage of records in “either micrographic or electronic storage media.”” The Commissioner believes that the rule should promote the efficiency and accuracy of recordkeeping, and those rules that inhibit innovation should be revisited.
New Hampshire – Bitcoin Sellers Are Money Transmitters
As of January 1, 2016, bitcoin sellers in New Hampshire are considered money transmitters, and must be licensed and bonded. Anyone who exchanges a digital currency for any other currency is designated as an “exchange,” and must become a licensed and bonded money transmitter. This will require a $500 application fee, additional application expenses, and a $100,000 surety bond.
Australia – Government Seeks to End Double Taxation of Digital Currencies
The Australian government will back legislation that addresses the double taxation on digital currencies. Under the current tax structure, bitcoin is considered a form of barter, rather than a form of currency. Thus, businesses are required to pay goods-and-services tax (GST) if they sell digital currencies. Then there is an additional tax burden if that business receives digital currencies as payment. Additionally, the country’s AML regulator, the Australian Transaction Reports and Analysis Centre, stated that it will seek new rules governing the use of distributed ledgers.