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
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
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
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
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
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
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
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
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
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” 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” 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
U.S. Developments Regulatory Updates Ohio Enacts Cybersecurity Law with addition of Blockchain to Ohio’s Uniform Electronic Transactions Act… Continue Reading
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
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
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
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
Updates: Yet again, the SEC instituted proceedings on April 5, 2018 to determine whether it will approve or disapprove a proposal by Cboe BZX Exchange on behalf of GraniteShares Bitcoin ETF and GraniteShares Short Bitcoin ETF (see our discussion of the Cboe Order above). On June 28, 2018 the SEC extended its period of review for … Continue Reading
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
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
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
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
