By Stephen Wink and Adam Zuckerman Decentralization is the key innovation enabled by blockchain technology, and can have significant technological, economic, and legal implications for web3 companies and protocols. Decentralization remains hard to grasp and define despite its importance. In the web3 spirit of collaboration and open source, Latham has partnered with a16z Crypto to … Continue Reading
The regulatory perimeter continues to expand as the Securities and Futures Commission introduces a comprehensive regime to regulate virtual asset service providers. By Simon Hawkins and Adrian Fong In December 2022, Hong Kong passed the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 (Amendment Bill), which will establish a new licensing regime and statutory framework … Continue Reading
The CRPTO Act is intended to increase transparency and consumer protections, and reduce conflicts of interest, through heightened disclosures and penalties. By Jenny Cieplak, Arthur S. Long, Yvette Valdez, Stephen P. Wink, and Deric Behar On May 5, 2023, New York Attorney General (NYAG) Letitia James introduced a bill that, if passed, would increase New … Continue Reading
In a major Web3 trademark infringement case, NFT creators prevail over those with a bad-faith intent to profit. By Stephen P. Wink, Tiffany M. Ikeda, Adam Zuckerman, and Deric Behar On April 21, 2023, Yuga Labs, the original creators of the Bored Ape Yacht Club (BAYC) non-fungible token (NFT) collection, successfully moved for summary judgment … Continue Reading
Whereas the original proposal did not directly discuss digital assets, the reopening release is mainly focused on digital asset platforms. By Stephen P. Wink, Marlon Q. Paz, Naim Culhaci, and Deric Behar On April 14, 2023, the Securities and Exchange Commission (SEC) issued a release amending portions of its earlier proposal to reinterpret the definition … Continue Reading
Congress will be “starting from scratch” in attempting to establish a regulatory framework for stablecoins — an issue that many believe is the top digital asset legislative priority. By Arthur S. Long, Parag Patel, Yvette Valdez, Pia Naib, and Deric Behar On April 15, 2023, the US House Financial Services Committee (Committee) published a draft … Continue Reading
This is the first decision by the Hong Kong Court on whether clients of a crypto exchange have proprietary claims to cryptocurrencies held on the platform. It confirms that cryptocurrency constitutes property under Hong Kong law. By Dominic Geiser, Simon Hawkins, Howard K. H. Lam, Adrian Hei-Yin Fong, Flora F. W. Innes, and Tsun Ming … Continue Reading
As content-based NFT projects seek to provide NFT owners with value beyond being scarce collectibles, they should consider whether to grant owners rights to commercialize the content underlying the NFTs. By Ghaith Mahmood, Heather Lui, and Justin Tzeng As the ecosystem for non-fungible tokens (NFTs) continues to mature, the discourse around content-based NFTs[1] has increasingly … Continue Reading
The bipartisan bill would provide a federal safe harbor for non-custodial blockchain service providers from state money transmission and digital asset licensing laws. By Arthur S. Long, Parag Patel, Yvette D. Valdez, Stephen P. Wink, Pia Naib, and Deric Behar On March 23, 2023, US House of Representatives Majority Whip Tom Emmer (R) and Representative Darren Soto … Continue Reading
A legislative initiative in Illinois would establish licensing and consumer protection requirements for digital asset businesses serving consumers in the state. By Jack Barber, Parag Patel, Arthur S. Long, John J. Sikora, Stephen P. Wink, Pia Naib, and Deric Behar On February 21, 2023, the Illinois Department of Financial and Professional Regulation (IDFPR) announced the Consumer … Continue Reading
By authorizing the issuance of a stable token, “Blockchain Valley” leads the way in state digital asset adoption and integration. By Jenny Cieplak, Arthur S. Long, Yvette Valdez, Stephen P. Wink, Adam Zuckerman, and Deric Behar For the last few years, Wyoming has been a leader among US states at the intersection of digital asset innovation, … Continue Reading
Cases filed in the past year by the DOJ, CFTC, and SEC represent a new phase in the US government’s digital asset enforcement efforts. By Douglas K. Yatter, Matthew Valenti, and Deric Behar Expanding beyond their earlier focus on registration and compliance violations and retail fraud, enforcement agencies have also begun to address other types of … Continue Reading
The new regime specifies licensing and reporting requirements for a range of activities related to virtual assets in the Emirate of Dubai. By Brian A. Meenagh, Matthew Rodwell, and Ksenia Koroleva On February 7, 2023, the Dubai Virtual Assets Regulation Authority (VARA) adopted the Virtual Assets and Related Activities Regulations 2023 (the Regulations) together with … Continue Reading
The Definitions aim to support the safe and efficient development of the digital asset derivatives market through consistent contractual standards. By Yvette D. Valdez, Thomas Vogel, Naffie Lamin, Tiiu Lemsalu, and Deric Behar On January 26, 2023, the International Swaps and Derivatives Association, Inc. (ISDA) published version 1.0 of the long-awaited ISDA Digital Asset Derivatives Definitions (the … Continue Reading
Custodia Bank was denied Federal Reserve membership, while certain crypto principal activities are deemed presumptively not appropriate for member banks. By Arthur S. Long, Pia Naib, and Deric Behar On January 27, 2023, the Board of Governors of the Federal Reserve System (Federal Reserve) took two actions, clarifying that it considers many cryptocurrency activities to be … Continue Reading
The Guidance clarifies the regulator’s expectations on safekeeping customer digital assets, and the disclosures that must accompany such arrangements. By Arthur S. Long, Parag Patel, Marlon Q. Paz, Yvette D. Valdez, Barrie VanBrackle, Pia Naib, Donald Thompson, and Deric Behar On January 23, 2023, the New York Department of Financial Services (NYDFS) published Guidance on Custodial … Continue Reading
The Financial Services Committee seeks to bring order to an industry many say has suffered from lack of proper rulemaking. By Stephen P. Wink, Nima H. Mohebbi, and Deric Behar On January 12, 2023, incoming House Financial Services Committee Chair Patrick McHenry established a new subcommittee on digital assets, financial technology, and inclusion. Rep. French Hill will … Continue Reading
While a conclusion to the much-hyped case may be approaching, market participants should be wary of doomsday prognostications. By Stephen P. Wink, Douglas K. Yatter, John Sikora, Benjamin Naftalis, William Baker, Jack Barber, Natalie DeLave, and Deric Behar As a new year begins, the digital assets industry is still enduring a deep and widespread crypto winter. When … Continue Reading
Banking organizations should ensure appropriate risk management, but regulators are skeptical of certain crypto activities as principal. By Arthur S. Long, Pia Naib, and Deric Behar On January 3, 2023, the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency … Continue Reading
Digital asset activities of licensed institutions must be approved and will be assessed for potential safety and soundness risks. By Arthur S. Long, Pia Naib, and Deric Behar On December 15, 2022, the New York State Department of Financial Services (NYDFS) issued final guidance to covered institutions engaging in (or seeking to engage in) virtual currency-related … Continue Reading
In granting the SEC’s motion for summary judgment, a federal court ruled that sales of LBC tokens were securities transactions. By Stephen P. Wink, Douglas K. Yatter, Jack McNeily, Benjamin Naftalis, Adam Zuckerman, and Deric Behar On November 7, 2022, the Securities and Exchange Commission (SEC) prevailed in a motion for summary judgment against blockchain-based streaming and … Continue Reading
The regime introduces rules on various crypto tokens, including cryptocurrencies and stablecoins, in the Dubai International Financial Centre. By Brian A. Meenagh, Matthew Rodwell, and Ksenia Koroleva On November 1, 2022, the Dubai Financial Services Authority (DFSA) crypto token regulatory regime came into effect. The rules expand upon the DFSA framework for regulating investment tokens … Continue Reading
NFT creators and consumers should evaluate the legal and commercial considerations of NFTs that are linked to copyright work. By Andrew Moyle, Christian McDermott, and Avinash Balendran The Law Commission of England and Wales (the Commission) is a statutory independent body that keeps the law of England and Wales under review and recommends reform where … Continue Reading
The latest statements from the government and regulators indicate that Hong Kong is moving forward with enhancing its virtual asset regulatory and legal regime. By Simon Hawkins and Adrian Fong The Hong Kong government and the Securities and Futures Commission (SFC) announced their policy stances and further measures to support the development of virtual assets (VA) in … Continue Reading
