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 tokens that are issued through an initial coin offering, or cryptocurrencies.

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

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 development of the underlying payment technologies.” He also suggested that cryptocurrencies do not pose material risks to financial stability due to their relative insignificance.
Continue Reading Mark Carney Criticizes Cryptocurrencies in Speech About the Future of Money

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.
Continue Reading FINRA Releases 2018 Regulatory and Examination Priority Letter

On December 14, 2017, the National Futures Association (NFA) issued Notices regarding commodity pool operators (CPOs), commodity trading advisors (CTAs) and introducing brokers (IBs), outlining new reporting requirements for CPOs, CTAs and IBs that deal in virtual currencies.
Continue Reading NFA Issues Notice of Additional Reporting Requirements for CPOs and CTAs That Trade Virtual Currency Products and IBs that Solicit or Accept Orders in Virtual Currency Products

On December 15, 2017, the Commodity Futures Trading Commission announced a proposed interpretation on what constitutes “actual delivery” of a virtual currency for purposes of Commodity Exchange Act (CEA) section 2(c)(2)(D)(ii)(III)(aa).
Continue Reading CFTC Issues Proposed Interpretation on Virtual Currency “Actual Delivery” in Retail Transactions

On December 15, the UK Financial Conduct Authority (FCA) published a feedback statement (Feedback Statement) on its April 2017 discussion paper (Discussion Paper) on distributed ledger technology (DLT).

The purpose of the Discussion Paper was to encourage dialogue in the UK on the regulatory implications of current and potential developments of DLT in the financial markets. The Feedback Statement summarizes and is a response to the feedback received on the FCA’s Discussion Paper. It also sets out the FCA’s views on recent developments in the DLT market and the FCA’s next steps.
Continue Reading FCA Publishes Feedback Statement on Distributed Ledger Technology

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 Act of 1970 while engaged in currency trading, and lacked required anti-money laundering controls.
Continue Reading Department of Justice Settles Virtual Currency Enforcement Action