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.
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On January 9, the European Securities and Markets Authority (ESMA) published advice addressed to the European Commission, the European Parliament and the Council of the EU on initial coin offerings (ICOs) and cryptoassets. On the same day, the European Banking Authority (EBA) also published advice on cryptoassets addressed to the European Commission.
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On November 13, the European Commission (EC) published a statement by Vice-President Valdis Dombrovskis on the regulation of cryptoassets and initial coin offerings (ICOs), which he presented at the European Parliament Plenary debate in Strasbourg.

Key takeaways include:
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On October 19, the European Securities and Markets Authority (ESMA) published an own-initiative report, produced by its Securities and Markets Stakeholder Group (SMSG), on initial coin offerings (ICOs) and crypto assets. The report gives advice to ESMA on steps it can take to contain the risks of ICOs and crypto assets, on top of existing regulation.
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On September 19, the UK’s House of Commons Treasury Committee (Treasury Committee) published a report on its inquiry into crypto-assets, launched in February 2018. The report is an update of what was provided on its website in May 2018 (for further details, see the May 25, 2018 edition of Corporate & Financial Weekly Digest).

Key findings and conclusions in the Treasury Committee’s report include the following:
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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. It also contains an explanatory statement in which the rapporteur, Ashley Fox, summarizes the changes he considers would improve it.
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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 or token, including:
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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 system for exchanging value.
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On January 8, the Financial Industry Regulatory Authority (FINRA) released its annual Regulatory and Examination Priority Letter detailing various issues that will be the subject of particular regulatory focus and scrutiny this year. Many of the areas noted are carry-overs from previous years, including the protection of senior investors and other retail customers, new product suitability reviews, and enhanced scrutiny of high-risk brokers. However, the letter also reflects various new issues that have caught FINRA’s attention and will require increased attention by FINRA member firms.
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