Digital Assets and Virtual Currencies

On October 25, the Financial Conduct Authority (FCA) published a new webpage setting out important information for UK cryptoasset businesses in the context of anti-money laundering (AML) and counter terrorist financing (CFT).

As announced in July 2019, the FCA will be the AML/CFT regulator for certain cryptoasset activities starting January 10, 2020. However, the scope of ‘cryptoasset activities’ is still to be determined by Her Majesty’s Treasury (HMT), whose consultation on the matter closed on June 10.
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On October 11, the leaders of the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchange Commission (collectively, the Agencies) issued a joint statement reminding persons engaged in activities involving digital assets of their anti-money laundering (AML) and countering the financing of terrorism (CFT) obligations under the Bank Secrecy Act of 1970 (BSA).
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On August 20, the European Securities and Markets Authority (ESMA) published a letter written jointly with the European Banking Authority (EBA) and addressed to the European Commission (EC) relating to cryptoassets. The letter responds to a letter from the Commission dated July 19.

The letter begins by welcoming the EC’s work responding to issues identified in the January 2019 reports by ESMA and the EBA on cryptoassets and initial coin offerings (for more information, see the January 11, 2019 edition of Corporate & Financial Weekly Digest). ESMA and the EBA agree that it is vital that further work progresses urgently to inform any actions taken by the new EC.
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On July 18, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 19-24 (Notice), which encourages member firms to continue notifying their Regulatory Coordinators about their digital assets activities. The Notice extends the requested notification period originally set forth in Regulatory Notice 18-20 from July 31, 2019 to July 31, 2020. (For additional information regarding

On July 8, in response to questions raised by market participants regarding the application of federal securities laws and the Financial Industry Regulatory Authority (FINRA) rules to the custody of digital asset securities and transactions, the staffs of the Division of Trading and Markets (the Division) and FINRA issued a joint statement. The joint statement seeks to articulate and clarify various considerations pertinent to many of the questions raised, particularly with respect to the Securities and Exchange Commission’s Customer Protection Rule applicable to SEC-registered broker-dealers.
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On July 3, the Financial Action Task Force (FATF) published an updated version (dated June 2019) of its anti-money laundering (AML) and counter-terrorist financing (CTF) standards.

This version includes a recently adopted interpretative note to recommendation 15 (new technologies), in which the FATF explains how its standards apply to virtual asset activities and virtual asset service providers (VASPs).
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The Commodity Futures Trading Commission has issued an order granting registration as a derivatives clearing organization (DCO) to Eris Clearing, LLC. The order permits Eris Clearing to clear fully collateralized virtual currency futures contracts. These contracts will be listed for trading on Eris Clearing’s affiliate, Eris Exchange, LLC.
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On July 3, the UK Financial Conduct Authority (FCA) published a consultation paper (CP19/22) on prohibiting the sale, marketing and distribution to retail clients of derivatives and exchange traded notes (ETNs) referencing certain types of cryptoassets by firms acting in, or from, the UK.
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On May 28, the International Organization of Securities Commissions (IOSCO) published a consultation paper on regulating crypto-asset trading platforms (CTPs).

The consultation paper describes issues and risks identified by IOSCO in relation to CTPs. The consultation paper describes key considerations and provides related toolkits that are intended to assist regulatory authorities who may be evaluating

On April 5, the UK Financial Stability Board (FSB) published a directory of regulators and other authorities in FSB jurisdictions who cover cryptoasset issues.

The FSB delivered the directory to the April 2019 G20 Finance Ministers and Central Bank Governors meeting. It notes that the directory’s purpose is to provide information only—it does not define