U.S. Developments Florida Court of Appeals Rules That Direct Sales of Bitcoin Constituted Money Transmission and the Sale of Payment Instruments Reversing the order issued by the Miami-Dade County Circuit Court, the Florida Court of Appeals issued an opinion on January 30 in the case of Florida v. Espinoza in which the appellate court ruled … Continue Reading
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 … Continue Reading
U.S. Developments Kik Publicizes Response to Possible SEC Enforcement On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice … Continue Reading
U.S. Developments Cboe Withdraws and Then Submits a Proposed Rulemaking for a Bitcoin ETF On January 22, 2019, Cboe BZX Exchange (Cboe) withdrew its proposed rulemaking with the U.S. Securities and Exchange Commission (SEC). Had the proposal been approved, Cboe would have been allowed to list shares of bitcoin electronically-traded funds (ETFs) backed by VanEck … Continue Reading
U.S. Developments Flood of State Virtual Currency Legislation Since the start of the new year there have been roughly nine virtual currency bills introduced or passed in four different states. Overall, the bills demonstrate a growing interest among the states in supporting virtual currency businesses through the codification of blockchain terminology for legal effect or … Continue Reading
U.S. Developments Regulatory Updates Texas Clarifies that Stablecoins Backed by Sovereign Currency Qualify as “Money” Under Money Transmission Statute The Texas Department of Banking recently issued a Supervisory Memorandum clarifying how its money transmission statute applies to stablecoins backed by sovereign currency. The Department reiterated—consistent with its 2014 guidance—that Texas’s money transmission statute only regulates … Continue Reading
On Wednesday, December 12, 2018, the D.C. Bar hosted a panel to discuss current developments in the world of crypto. Among the panelists were two senior SEC officers: Jonathan Ingram, Deputy Chief Counsel, Division of Corporation Finance, and Jennifer Leete, Assistant Director, Division of Enforcement. Also participating on the panel was Era Anagnosti, a former … Continue Reading
U.S. Developments Congressmen Introduce Legislation to Define “Digital Token” Under the Securities Laws On December 20, 2018, two congressmen introduced the “Token Taxonomy Act” (H.R. 7356) before the 115th Congress in an effort to define “digital token” under the federal securities laws. H.R. 7356 was introduced by Rep. Warren Davidson (R-Ohio) and Rep. Darren Soto … Continue Reading
On September 24, 2018, the French data protection authority, Commission Nationale de l’Informatique et des Libertés (CNIL), became the first data protection authority to issue written guidance on the intersection of the use of blockchain technology and the General Data Protection Regulation (GDPR). Due to the decentralized and permanent nature of the blockchain, there is … Continue Reading
U.S. Developments SEC Remarks on International Virtual Currency Enforcement On December 5, 2018, Steven Peikin, Co-Director of the Division of Enforcement at the U.S. Securities and Exchange Commission (“SEC”), gave a speech at the IOSCO/PIFS-Harvard Law School Global Certificate Program for Regulators of Securities Markets on the topic of international cooperation in the enforcement of … Continue Reading
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
The following was posted on the Perkins Coie’s Asset Management ADVocate, to read the full post, please click here. 2018 Recap: Tokens, Coins, Cryptocurrencies, and Other Digital Assets under the Federal Securities Laws By Michael S. Didiuk on November 13, 2018 Posted in Compliance In this post we discuss where things stand regarding the treatment … Continue Reading
The following was posted on the Perkins Coie’s Asset Management ADVocate, to read the full post, please click here. EtherDelta Founder Sanctioned for Operating an Unregistered Securities Exchange By Michael S. Didiuk and Conor O’Hanlon on November 9, 2018 Posted in Compliance In this post we discuss how on November 8, the SEC announced an … Continue Reading
The following was posted on the Perkins Coie’s Asset Management ADVocate, to read the full post, please click here. 2017 Recap: Tokens, Coins, Cryptocurrencies, and Other Digital Assets under the Federal Securities Laws – Facts and Circumstances By Michael S. Didiuk on November 12, 2018 This post focuses on the Securities and Exchange Commission’s (“SEC”) … Continue Reading
U.S. Developments Regulatory Updates FATF Issues Virtual Currency Guidance On October 19, the Financial Action Task Force (“FATF”) published the outcomes of its Plenary meeting. Included in the outcomes of the meeting were new recommendations related to the regulation of virtual currency (the “2018 Virtual Currency Recommendations”). In addition to the 2018 Virtual Currency Recommendations, … Continue Reading
On June 27, 2018, the Chinese Hangzhou Internet Court announced its decision on a case regarding the infringement of the right of communication through an information network. In a first for Chinese courts, the court accepted electronic data that was stored using blockchain technology as legal evidence. The court also clarified the examination standards for … Continue Reading
On October 18, 2018, the U.S. Securities and Exchange Commission (SEC), announced the launch of the agency’s Strategic Hub for Innovation and Financial Technology (FinHub).[1] FinHub is a resource for industry engagement between financial technology companies (fintechs), market participants, the public, and the SEC. This client update provides a high-level overview of the FinHub initiative … 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
While cryptocurrencies and digital tokens — also known as “digital assets” — have disrupted traditional notions of commerce, capital and investing, there is another asset which any company engaged in this space will need: insurance. Given the rapidly-evolving nature of this new technology and the uncertainties surrounding applicable laws and regulations, it can be challenging … 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 following summary is available in our sister blog, The Fintech Report. Roundup of CFTC Resources Blockchain Week in Review: Week of September 24-28, 2018 U.S. Developments Cryptocurrency and the Colorado Money Transmitter License Act On September 20, 2018, following months of consultation with the Colorado Attorney General’s office, Colorado’s Division of Banking released interim … 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
This post originally appeared in The Derivatives and Repo Report, and can be accessed here.: This post is the second in a series that outlines key considerations for investment funds and their advisers regarding the application of the U.S. commodity laws to cryptocurrency derivatives. In Part 1, we focused on the status of cryptocurrencies as … Continue Reading
