Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Category Archives: Digital Assets and Virtual Currencies

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Department of Justice Settles Virtual Currency Enforcement Action

Posted in Digital Assets and Virtual Currencies, Litigation
The US Attorney’s Office in the Northern District of California recently settled an enforcement action against Ripple Labs Inc., a Delaware corporation providing virtual currency exchange services. According to the settlement agreement, Ripple Labs was not registered with the Financial Crimes Enforcement Network (FinCEN) as a money services business (MSB) pursuant to the Bank Secrecy… Continue Reading

ESMA Issues Call for Evidence on Virtual Currency

Posted in Banking, Derivatives, Digital Assets and Virtual Currencies, EU Developments, Financial Markets, Private Investment Funds
On April 22, the European Securities and Markets Authority (ESMA) issued a call for information (Call for Evidence) on virtual currency. Unlike recent studies performed by the European Banking Authority and HM Treasury, ESMA is not calling for comment on virtual currencies as a payment technology or alternative form of money. In particular, ESMA is… Continue Reading

Conference of State Bank Supervisors Issues Draft Model Regulatory Framework on Virtual Currency

Posted in Digital Assets and Virtual Currencies
On December 16, the Conference of State Bank Supervisors (CSBS), a state banking watchdog group, released a draft model regulatory framework on virtual currency (Draft Framework) that is less stringent than the originally released BitLicense proposal from the New York State Department of Financial Services (DFS). … Continue Reading

DFS Superintendent Lawsky Discusses Revised BitLicense Framework

Posted in Digital Assets and Virtual Currencies
On December 18, New York State Department of Financial Services (DFS) Superintendent Benjamin Lawsky delivered remarks on the revised BitLicense framework at the Bipartisan Policy Center in Washington, DC. If adopted, the proposed BitLicense framework would regulate and license companies performing virtual currency business activities. Superintendent Lawsky explained that the changes to the BitLicense framework… Continue Reading

SEC Sanctions Operator of Unregistered Virtual Currency Exchanges

Posted in Digital Assets and Virtual Currencies
On December 8, the Securities and Exchange Commission sanctioned a computer programmer for operating two online exchanges that traded securities using virtual currencies without registering them as broker-dealers or stock exchanges. The programmer, Ethan Burnside, operated the two exchanges through his company, BTC Trading Corp., from August 2012 to October 2013. Account holders were able… Continue Reading

NYS Department of Taxation and Finance Issues Tax Guidance on Virtual Currency Transactions

Posted in Digital Assets and Virtual Currencies
On December 5, the New York State Department of Taxation and Finance (DTF) issued the memorandum “Tax Department Policy on Transactions Using Convertible Virtual Currency.” The memorandum clarified that under New York law, convertible virtual currency (such as bitcoin) is considered “intangible property,” which is not subject to sales tax. Therefore, the purchase or sale… Continue Reading

NYS DFS Publishes All BitLicense Comments; California Considers Regulation

Posted in Digital Assets and Virtual Currencies
On December 3, the New York State Department of Financial Services (DFS) published all 3,746 public comments it received on the proposed “BitLicense” regulatory framework that would cover businesses participating in “virtual currency business activities.” Through his Twitter account announcing the comments, DFS Superintendent Benjamin Lawsky stated that a revised BitLicense proposal should be produced… Continue Reading

UK Treasury Calls for Information on Digital Currencies

Posted in Digital Assets and Virtual Currencies
On November 3, the UK Treasury issued a call for information on digital currencies, including Bitcoin. Views are being solicited from the public, the financial services industry, regulators, and law enforcement agencies. Commenters are asked to provide their views on how digital currencies can improve customer payments as well as encourage financial innovation. Commenters are also requested to… Continue Reading

CFTC Hears Testimony on Bitcoin

Posted in Digital Assets and Virtual Currencies, Dodd-Frank Developments
The Global Markets Advisory Committee of the Commodity Futures Trading Commission held a public meeting on October 9, in which one panel addressed Bitcoin. The meeting focused on informing the staff regarding basic applications of Bitcoin technology and issues relating to bitcoin-based derivative instruments. Among the panelists for the CFTC meeting was Leonard Nuara, president of TeraExchange… Continue Reading

First Bitcoin Swap Proposed

Posted in Digital Assets and Virtual Currencies
According to Reuters reports on September 12, TeraExchange, LLC, received approval from the Commodity Futures Trading Commission to begin listing an over-the-counter swap that is based on the price of a bitcoin. The CFTC approval marks the first time a US regulatory agency approved a bitcoin financial product. In March, TeraExchange announced the finalization and… Continue Reading

Judge Rakoff Rules that Bitcoin Is Money in New York Federal Court

Posted in Digital Assets and Virtual Currencies, Litigation
On August 19, Judge Jed S. Rakoff of the US District Court for the Southern District of New York issued a ruling in the case of Robert Faiella, holding that bitcoins are “money,” citing the plain meaning of the term in The Merriam-Webster Dictionary. Faiella was charged with operating an unlicensed money transmitting business in… Continue Reading

Consumer Financial Protection Bureau Releases Virtual Currency Advisory

Posted in Digital Assets and Virtual Currencies
The US Consumer Financial Protection Bureau (CFPB) released an advisory on the risks of virtual currencies. The advisory was issued two months after the Government Accountability Office requested that the CFPB look more closely at the virtual currency industry. The CFPB has also begun accepting complaints from virtual currency users regarding such products and services.… Continue Reading

New York DFS Proposes First Comprehensive Regulatory Framework for Virtual Currency Businesses

Posted in Digital Assets and Virtual Currencies
On July 17, the New York State Department of Financial Services (DFS) released the draft “BitLicense,” a proposed regulatory framework to license Virtual Currency Business Activity. The proposed regulations follow DFS hearings held in January 2014 and are intended to promote consumer protection, stability and security in the operation of virtual currency exchanges, among other virtual… Continue Reading

FEC Approves Bitcoin Political Donations While SEC Issues Investor Alert

Posted in Digital Assets and Virtual Currencies
On May 8, the Federal Election Commission (FEC) unanimously affirmed in an advisory opinion that political committees (including candidate campaigns and political action committees) could legally accept small bitcoin donations, acknowledging that digital currencies are a form of “money or anything of value” under election laws. While the advisory permits small bitcoin-denominated donations, it forbids… Continue Reading

Texas Department of Banking Issues Guidance on Treatment of Virtual Currency

Posted in Digital Assets and Virtual Currencies
On April 3, the Texas Department of Banking released a supervisory memorandum on the regulatory treatment of virtual currencies such as bitcoin under the Texas Money Services Act. The guidance clarified that virtual currency was distinguishable from sovereign currency and did not fall under the regulatory definition of “money or monetary value” under the Money… Continue Reading

New York Department of Financial Services Issues Public Order to Invite Virtual Currency Exchange Proposals

Posted in Digital Assets and Virtual Currencies
On March 11, the New York Department of Financial Services (the DFS) issued a public order stating that it will begin considering proposals and applications to establish virtual currency exchanges located in New York. DFS Superintendent Benjamin M. Lawsky stated, “The recent problems at Mt. Gox and other firms further demonstrate the urgent need for… Continue Reading

FinCEN Issues MSB Guidance for Bitcoin Miners, Investors and Software Developers

Posted in Digital Assets and Virtual Currencies
On January 30, the Financial Crimes Enforcement Network (FinCEN) published two administrative rulings (Administrative Rulings) clarifying that certain participants in the Bitcoin economy (and other convertible virtual currency economies) do not constitute money services businesses (MSBs) under the Bank Secrecy Act (BSA).  The Administrative Rulings elaborate upon guidance issued by FinCEN on March 18, 2013… Continue Reading