The Federal Reserve Board, on August 15, 2022, issued final guidelines for regional Reserve Banks to use when considering applications for Federal Reserve “master accounts”—deposit accounts that enable direct access to the Federal Reserve’s payment systems and provide critical infrastructure to financial institutions operating in the United States. The final guidelines comprise a set of
OFAC Takes Action Against Virtual Currency Tornado Cash in Novel Application of Sanctions Authorities
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), on August 8, 2022, sanctioned virtual currency mixer Tornado Cash. OFAC alleged that it had been “used to launder more than $7 billion worth of virtual currency since its creation in 2019 [, including] over $455 million stolen by the Lazarus Group[,]” a Democratic People’s Republic of Korea (DPRK) state-sponsored hacking group that OFAC identified for sanctions in 2019, in what the agency characterized as the largest known virtual currency heist to date.[1]
Blockchain Industry Group White Paper – Fundamentals of Non-Fungible Tokens
Non-fungible tokens have been widely adopted across a variety of industries. The fast-developing NFT ecosystem of technical and commercial innovation is aimed at the promise of bridging physical world concepts of uniqueness and scarcity with the digital world. As with all forms of technical innovation, NFTs pose unique legal challenges to participants in this ecosystem.
Perkins Coie Obtains SEC Staff Relief for IMVU’s New Transferable Blockchain Digital Asset, VCOIN
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
White Paper: Anti-Money Laundering Regulation of Privacy-Enabling Cryptocurrencies
Privacy-enabling cryptocurrencies, commonly known as privacy coins, are enhanced versions of early cryptocurrencies that were developed to protect the financial privacy of individuals and businesses alike. Each privacy coin leverages innovative mechanisms that provide privacy, encryption, and security to its users. Alongside their positive effects, howev
er, these mechanisms have raised an important compliance question:
Fintech Regulatory Sandboxes: Update on Arizona’s Sandbox and Other Developments
Arizona’s financial technology (“fintech”) sandbox (“Sandbox”), the first of its kind in the United States, has been open for several months and has accepted three participants. A month after the program’s launch, Arizona’s Attorney General announced his approval of the first participant, payment platform Omni Mobile, Inc.[1] Two other companies providing consumer lending services, Sweetbridge NFP, Ltd. and Grain Technology, Inc., joined Omni as Sandbox participants shortly thereafter.[2] Arizona’s Sandbox may serve as a helpful illustration of what entrepreneurs can expect in Arizona (should they also wish to participate in the Sandbox) as well as in other states that decide to implement similar programs.[3] To that end, this client update provides an overview of regulatory sandboxes generally, Arizona’s Sandbox, and potential future developments.
Continue Reading Fintech Regulatory Sandboxes: Update on Arizona’s Sandbox and Other Developments
Key Takeaways From the Tezos Litigation
On August 7, Judge Richard Seeborg of the U.S. District Court for the Northern District of California denied in part a motion to dismiss (the “Order”) sought by the defendants in In Re Tezos Securities Litigation (the “Tezos Case”). Among other important insights, the Order’s reasoning illustrates the potentially broad reach of the U.S. federal securities laws to blockchain token sellers outside the United States.
Continue Reading Key Takeaways From the Tezos Litigation
Virtual Currency: Anti-Money Laundering and Terrorist Financing Update
On July 18, 2018, the Financial Action Task Force[1] (“FATF”), published its report to the July 2018 G20 Finance Ministers and Central Bank Governors’ meeting.[2] The report sets out FATF’s ongoing work to fight money laundering and terrorist financing, and in particular FATF’s work programme on virtual currencies, including the money laundering and
SEC Takes Aim at Initial Coin Offerings Again
The SEC is targeting ICOs once again, but it is now adding more focus through its new Enforcement Division Cyber Unit.
- In its enforcement settlement with Munchee, Inc., the SEC looked past the utility of a “utility token” in its “securities” analysis and instead focused on aspects such as marketing and the existence of a
Blockchain and Digital Token Update: SEC Releases Investigative Report and Investor Bulletin
On July 25, 2017, the Securities and Exchange Commission (“SEC”) released groundbreaking materials relating to blockchain tokens. These materials provide significant and welcome insight to the SEC’s and its staff’s thinking in this area, although they leave a number of important questions unanswered.
The SEC released a detailed investigative report under Section 21(a)