Category: Regulatory and Legislative Developments

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Treasury Identifies Iranian Nationals and Their Digital Currency Addresses Used to Facilitate Ransomware Attacks

On November 28, 2018, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC), announced an action against two Iranian citizens, Ali Khorashadizadeh and Mohammad Ghorbaniyan, who facilitated the exchange of bitcoin ransom payments on behalf of Iranian malicious cyber actors.  This client update provides an overview of the OFAC action and identifies certain … Continue Reading

Blockchain Week in Review: Week of November 5-9, 2018

U.S. Developments Regulation Upcoming Bitcoin exchange-traded funds (“ETF”) Decisions On January 4, 2018, NYSE Arca filed a proposed rule change to list 9 Bitcoin ETFs. Subsequently, the time for the Security Exchange Commission (“SEC”) to approve or disapprove was pushed back in March, April, July, and September. On August 22, 2018, the SEC disapproved the … Continue Reading

FinCEN Advisory Emphasizes Importance of U.S.-Iran Sanctions and AML/CFT Compliance for Virtual Currency Businesses

On October 11, 2018, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) released an advisory (the Advisory) intended to help money services businesses (MSBs) and foreign financial institutions better understand how U.S. sanctions on Iran affect their compliance obligations under the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) rules and under the … Continue Reading

Blockchain Week in Review – Week of October 8-12, 2018

U.S. Developments Regulatory Updates FinCEN Issues Advisory on Illicit Iranian Activities On October 11, 2018, the U.S. Treasury Department Financial Crimes Enforcement Network (“FinCEN”) issued an advisory to help money services businesses  and foreign financial institutions better understand the U.S. Anti-Money Laundering/Combating the Financing of Terrorism (“AML/CFT”) risks related to Iranian activity.  The report encourages … Continue Reading

Blockchain Week in Review: Week of October 1-5, 2018

U.S. Developments Federal Bank Regulators Issue Joint Statement on Collaborative BSA/AML Compliance On October 3, 2018, a group of federal bank regulators and the Financial Crimes Enforcement Network (“FinCEN”) announced in a joint statement that banks and credit unions could collaborate and share resources to manage their Bank Secrecy Act (“BSA”) and anti–money laundering (“AML”) … Continue Reading

SEC and FINRA Target Cryptocurrency Hedge Fund Manager and Broker-Dealers in New Wave of Digital Asset Enforcement Proceedings

The SEC and FINRA recently announced a series of enforcement actions against new types of actors in the digital asset space—private fund managers and broker-dealers.… Continue Reading

Blockchain Week in Review: Week of September 17-21, 2018

U.S. Developments Hester Peirce Remarks at Cato Institute Conference Hester Peirce made remarks at the Cato Institute’s Fintech Unbound conference on September 12, 2018. Commissioner Peirce commented that securities regulators are too risk averse, stating that “capital markets are all about taking risk, and queasiness around risk-taking is particularly inapt” and that “a key purpose … Continue Reading

Blockchain Week in Review: Week of September 10-14, 2018

The following summary is available in our sister blog, The Fintech Report. State Bank Regulators and NYDFS to renew litigation against OCC Blockchain Week in Review: Week of September 10-14, 2018 U.S. Developments Regulatory Updates U.S. Judge Says Initial Coin Offerings May Be Covered by Securities Law On September 11, U.S. District Judge Raymond Dearie … Continue Reading

Cryptocurrency Derivatives, Funds and Advisers: Key Considerations Under U.S. Commodity Laws (Part 1 – Cryptos Are Commodities (Except When They Are Not))

This post originally appeared in The Derivatives and Repo Report, and can be accessed here.: In this multi-part posting, we outline key considerations for investment funds and their advisers regarding the application of the U.S commodity laws to cryptocurrency derivatives.   Part 1 focuses on the status of cryptocurrencies as commodities and how that status relates … Continue Reading

SEC Staff Rejects Bitcoin Futures Based ETFs – Commission Stays Rejections Pending Its Review

For those of you who have been following along thus far, the U.S. Securities and Exchange Commission (“SEC”) and the SEC’s Division of Trading and Markets (“SEC Staff”) have been wrestling since December 2017 with whether to approve or disapprove exchange-traded funds (“ETFs”) that invest in bitcoin futures contracts.  On August 22, 2018, the SEC Staff decided … Continue Reading

Why Blockchain Custody Is So Difficult—A Hard Part

“Why Blockchain Custody Is So Difficult—A Hard Part” was recently posted on Perkins Coie’s Asset Management ADVocate blog. The blog post continues the analysis of the difficult question of how to comply with regulations requiring independent custody of cryptocurrency. This series focuses on the custody requirements for registered investment companies in an attempt to respond … Continue Reading

Why Blockchain Custody Is So Difficult—The Simple Part

“Why Blockchain Custody Is So Difficult—The Simple Part” was recently posted on Perkins Coie’s Asset Management ADVocate blog. The post begins with an analysis of the difficult question of how to comply with regulations requiring independent custody of cryptocurrency. This series will focus on the custody requirements for registered investment companies in an attempt to … Continue Reading

SEC Denies for the Second Time a Proposal for a Bitcoin Exchange-Trade Product

On July 26, 2018, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) issued an order, by a 3-1 vote, disapproving a proposed rule change (the “Proposal”) that would have allowed for a bitcoin exchange-traded product (“ETP”) (the “Order”).  In the Order, the SEC re-asserted many of its prior concerns and reasons for denying the same proposal … Continue Reading

Dissent on the SEC’s Re-Disapproval of a Bitcoin Exchange-Traded Product

On July 26, 2018, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) issued an order disapproving a proposed rule change that would have allowed for a bitcoin exchange-traded product (“ETP”) (the “Order”).  However, the Order was not unanimous amongst the SEC’s Commissioners.  Commissioner Hester M. Peirce issued a stand-alone dissent against the Order, arguing that the … Continue Reading

Blockchain Week in Review: Week of July 9, 2018

The following update is on our Fintech Legal Report: FINRA Issues a Regulatory Notice for Firms to Let FINRA Know About Digital Asset Activities Blockchain Week in Review: Week of July 9, 2018 U.S. Developments Regulatory Updates Vermont Enacts Blockchain Business Development Bill On May 30, Vermont Governor Phil Scott signed SB 269 (thereby becoming … Continue Reading

Blockchain Week in Review: Week ending – June 29

U.S. Developments Regulatory Updates SEC and CFTC Announce New Cooperation Agreement On June 28, the Commodity Futures Trading Commission and the Securities and Exchange Commission announced a new Memorandum of Understanding meant to allow two agencies to further coordinate in areas of common interest. Under the MOU, the two agencies agreed to identify areas of … Continue Reading

Senior SEC Officials Provide Regulatory Clarity for Digital Assets

From Uncertainty toward Regulatory Clarity: Senior SEC Officials Provide Regulatory Clarity for Digital Assets Summary is below, please click here for the full alert narrative. On June 14, 2018, the Director of the Division of Corporation Finance of the Securities and Exchange Commission delivered a speech outlining the framework used by the SEC Staff in … Continue Reading

Ether is not a security: Summary of SEC Remarks Today

In a speech today during a crypto conference in San Francisco, a top Securities and Exchange Commission official expressed his view that, at this point, sales of Ether are not securities transactions. Speaking from prepared remarks, Bill Hinman, Director of the Division of Corporation Finance said: “Based on my understanding of the present state of Ether, the … Continue Reading

Accounting Group Again Requests Guidance From The IRS on Virtual Currency Tax Issues

The primary professional organization for accounting professionals (AICPA) recently renewed their requests to the Internal Revenue Service for U.S. virtual currency guidance on key tax issues. The IRS has not shown any willingness to publish more advice in this area, so a response to the letter may not be forthcoming. The IRS has ignored the AICPA’s … Continue Reading

Blockchain in Review – Weeks of May 7th through May 25th, 2018

U.S. Developments Regulatory Updates CFTC Staff Issues Advisory to Exchanges and Clearinghouses on Virtual Currency Derivatives On May 21, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight and Division of Clearing and Risk released an advisory that provides guidance to designated contract markets (DCM), swap execution facilities (SEF), and derivatives clearing organizations (DCO) … Continue Reading
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