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.
Continue Reading

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.
Continue Reading

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).
Continue Reading

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.
Continue Reading

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.
Continue Reading

Recognizing the need for guidance as to the application of US federal securities law for those considering an Initial Coin Offering (ICO), or otherwise engaging in the offer, sale or distribution of a digital asset, the Securities and Exchange Commission released its Framework for “Investment Contract” Analysis of Digital Assets. The Framework represents the views of the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) and is designed to provide additional guidance in areas that the SEC has not previously addressed.
Continue Reading

On April 3, the Securities and Exchange Commission’s Division of Corporate Finance (the “Division”) responded to TurnKey Jet, Inc.’s (TKJ) letter dated April 2, requesting confirmation that the Division would not recommend enforcement action to the SEC in connection with its offer and sale of tokens without registration under the Securities Act of 1933 and the Securities Exchange Act of 1934. In issuing its response that it would not recommend enforcement action to the SEC, the Division noted that:
Continue Reading

On January 22, the Financial Industry Regulatory Authority (FINRA) issued its annual Risk Monitoring and Examination Priorities Letter. This year’s letter includes a number of new areas for firms to consider in seeking to improve their compliance, supervisory and risk management programs.
Continue Reading