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Corporate & Financial Weekly Digest

Category Archives: Digital Assets and Virtual Currencies

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ECON Publishes Draft Report on Proposed Regulation on European Crowdfunding Service Providers

Posted in Digital Assets and Virtual Currencies, EU Developments, Financial Markets
On August 10, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published its draft report on the European Commission’s March 2018 proposal for a regulation on European crowdfunding service providers (CSPs). The draft report contains a draft European Parliament legislative resolution, the text of which sets out suggested amendments to the European Commission’s proposal.… Continue Reading

NFA Announces the Effective Date of Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities

Posted in CFTC, Derivatives, Digital Assets and Virtual Currencies
On August 9, the National Futures Association (NFA) announced the effective date of its recently adopted Interpretive Notice, Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretative Notice will go into effect on October 31 (“Effective Date”).… Continue Reading

FCA Publishes Dear CEO Letter on Cross-Border Booking Arrangements

Posted in Brexit, Brexit/UK Developments, Digital Assets and Virtual Currencies, Financial Markets, UK Developments
On August 8, the UK Financial Conduct Authority (FCA) published a “Dear CEO” letter concerning cross-border booking arrangements. In the letter, the FCA explains that the UK’s impending withdrawal from the EU has resulted in firms needing to put in place contingency plans that, when executed, will impact current business models, legal entity strategies and… Continue Reading

SEC Disapproves BZX Proposed Rule Change to List Shares of Bitcoin-Based Exchange-Traded Product

Posted in Broker-Dealer, Digital Assets and Virtual Currencies
On July 26, the Securities and Exchange Commission disapproved a Bats BZX Exchange proposed rule change that would have permitted the listing and trading of shares of the Winklevoss Bitcoin Trust (Trust) on BZX. This is the SEC’s second disapproval of the proposed rule change as it has previously disapproved the exchange’s original proposal in… Continue Reading

NFA Interpretive Notice Regarding Engaging in Virtual Currency

Posted in CFTC, Derivatives, Digital Assets and Virtual Currencies
On July 20, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for approval a proposed interpretive notice regarding Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The new disclosure obligations will apply to all NFA members engaging in transactions in virtual currency derivatives and virtual currency, as well as other… Continue Reading

CFTC Issues Customer Advisory on Digital Coins and Tokens

Posted in CFTC, Digital Assets and Virtual Currencies
The Commodity Futures Trading Commission has issued an advisory warning customers of the dangers of purchasing digital coins or tokens. Among other things, the advisory warns customers that buying digital coins or tokens for speculative purposes carries significant risk and identifies various factors that could affect the current or longer-term value of a digital coin… Continue Reading

FSB Publishes Report on Cryptoassets

Posted in Digital Assets and Virtual Currencies, Financial Markets, UK Developments
On July 16, the Financial Stability Board (FSB) published a report on the work of the FSB and standard setting bodies on cryptoassets. The report was delivered to the G20 Finance Ministers and Central Bank Governors ahead of their meeting on July 21 – 22. The standard setting bodies, whose work is summarized in the… Continue Reading

FCA Publishes “Dear CEO” Letter on Cryptoassets and Financial Crime

Posted in Digital Assets and Virtual Currencies, Financial Markets, UK Developments
The UK Financial Conduct Authority (FCA) has published a “Dear CEO” letter dated June 11, on cryptoassets and financial crime. The purpose is to ensure that banks adequately manage the financial crime risks associated with cryptoassets. The FCA defines cryptoassets as any publicly available medium of exchange that features a distributed ledger and a decentralized… Continue Reading

Treasury Committee’s Virtual Currencies Inquiry Publishes FCA and Bank of England Evidence

Posted in Digital Assets and Virtual Currencies, UK Developments
On May 22, the UK’s House of Commons Treasury Committee (Treasury Committee) updated its webpage on its inquiry into what it refers to as “digital currencies.” The webpage now provides links to written evidence the Treasury Committee has received from the UK Financial Conduct Authority (FCA) and the Bank of England (BoE) in which they… Continue Reading

FCA Publishes Statement Regarding the Requirement for Firms Offering Cryptocurrency Derivatives To Be Authorized

Posted in Digital Assets and Virtual Currencies, UK Developments
On April 6, the UK Financial Conduct Authority (FCA) published a statement on the requirement that firms trading in cryptocurrency derivatives may need to be authorized. The statement confirms that performing activities or providing services that amount to regulated activities in relation to derivatives are likely to require FCA authorization when performed in relation to… Continue Reading

UK Government Launches Fintech Sector Strategy

Posted in Digital Assets and Virtual Currencies, Financial Markets, UK Developments
On March 22, the UK government held its second annual International Fintech Conference. The Conference forms part of the UK’s plans to maintain its world leading position in technology-enabled innovation in financial services (FinTech). The Conference follows the launch of the European Commission’s FinTech Action Plan, further details of which are available in the Corporate… Continue Reading

Mark Carney Criticizes Cryptocurrencies in Speech About the Future of Money

Posted in Digital Assets and Virtual Currencies, UK Developments
On March 2, the governor of the Bank of England (BoE), Mark Carney, delivered a speech entitled “The Future of Money.” Mr. Carney highlighted shortcomings of cryptocurrencies and the need for authorities to isolate, regulate or integrate them, with his preference being regulation. Mr. Carney stated that “isolation risks foregoing potentially major opportunities from the… Continue Reading

European Commission Publishes FinTech Action Plan

Posted in Digital Assets and Virtual Currencies, EU Developments
On March 8, the European Commission issued a press release unveiling a 23-step action plan on how to harness the opportunities presented by technology-enabled innovation in financial services (FinTech). The European Commission identifies two goals: (1) capitalizing on fast-moving progress in technology to improve the European Union’s economy, and (2) incentivizing a more competitive and… Continue Reading

CFTC and UK Financial Conduct Authority Sign Cooperation Arrangement on Financial Technology Innovation

Posted in CFTC, Digital Assets and Virtual Currencies, UK Developments
On February 19, the Commodity Futures Trading Commission and the UK Financial Conduct Authority (FCA) signed the “Cooperation Arrangement on Financial Technology Innovation,” which memorializes the intention of the CFTC and FCA to collaborate and support their respective financial technology (FinTech) initiatives—LabCFTC and FCA Innovate. The arrangement intends to support these FinTech initiatives through an… Continue Reading

FCA and CFTC Enter Into Cooperation Agreement on FinTech

Posted in CFTC, Digital Assets and Virtual Currencies, UK Developments
On February 19, the UK’s Financial Conduct Authority (FCA) and the United States Commodity Futures Trading Commission (CFTC) (collectively the Regulators) published a press release announcing that they have signed a Cooperation Agreement on the same date with each other on financial technology (FinTech) innovation.… Continue Reading

Warning to Consumers on Virtual Currency Risks Issued by EBA, EIOPA and ESMA

Posted in Digital Assets and Virtual Currencies, EU Developments
On February 12, the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA) (collectively the three European Supervisory Authorities (three ESAs)) published a joint warning to consumers relating to the high risks of buying and/or holding virtual currencies (such as Bitcoin, Ether and Ripple).… Continue Reading

Application Window for Cohort 4 of the Regulatory Sandbox Is Open Until the End of January

Posted in Digital Assets and Virtual Currencies, UK Developments
The application window for businesses to be part of cohort 4, the latest cohort, of the UK Financial Conduct Authority’s (FCA) regulatory sandbox is open until January 31. Businesses such as authorized firms, unauthorized firms that require authorization and technology businesses can apply to each cohort of the FCA’s sandbox.… Continue Reading

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