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Category Archives: Cryptoassets

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Responsible Financial Innovation Act Offers Clarity, Safeguards for Digital Assets

The RFIA is the most wide-ranging crypto bill yet. Latham & Watkins presents a blog series on the Responsible Financial Innovation Act, which was introduced in the US Senate on June 10, 2022, to create a framework for digital assets, cryptocurrency, and blockchain technology.  On June 10, 2022, US Senators Cynthia Lummis from the Senate … Continue Reading

UK High Court Rules on Liability of Bitcoin Software Developers

The Court held that software developers do not owe a duty of care to bitcoin owners who lost their private keys. By Christian F. McDermott, Andrew C. Moyle, and Nara Yoo In Tulip Trading Ltd (TTL) v. Bitcoin Association for BSV and others, TTL claimed that personal computers of its CEO, Dr. Craig Wright, were … Continue Reading

FRB Again Highlights Risks in the Stablecoin Sector

Treasury officials believe congressional action is “highly appropriate” this year to address the risks that the latest financial stability report underscores. By Alan W. Avery, Pia Naib, and Deric Behar On May 9, 2022, the Board of Governors of the Federal Reserve System (FRB) published its semi-annual Financial Stability Report (Report). The Report, which covers … Continue Reading

California Executive Order Foreshadows Stronger Regulation of Digital Assets

The Executive Order aims to strengthen consumer protection and cultivate innovation in digital assets and related financial products and services. By Christopher D. Frey, Scott D. Joiner, Barrie VanBrackle, Katherine A. Sawyer, and Scott Kanchuger* On May 4, 2022, California Governor Gavin Newsom issued an Executive Order (California Order) calling upon California state agencies to … Continue Reading

Decentralized Autonomous Organizations: Piercing the Digital Veil

A complaint filed in federal court will test the boundaries of protection from liability for individuals behind decentralized autonomous organizations. By Stephen P. Wink, Nima H. Mohebbi, Adam Zuckerman, and Deric Behar On May 2, 2022, a putative class action was filed in the US District Court for the Southern District of California against the bZx protocol … Continue Reading

Rising Regulation of Fintech Innovation — Implications for PE Investments

Assertive regulators are bringing greater clarity and new challenges as they step up oversight of fintech innovation. By Stuart Davis, Tom D. Evans, Nicola Higgs, Christian F. McDermott, David J. Walker, Brett Carr, Catherine Campbell, and Charlotte Collins As the fast-growing fintech industry thrives, the sector has begun to attract greater regulatory scrutiny. We expect new legal and regulatory focus and oversight of … Continue Reading

Digital Assets Could Revolutionize Global Remittances

The promise of faster and cheaper remittances may accelerate crypto adoption in many emerging markets, including those that have not historically utilized credit and debit payments, notably Latin America.  By Gianluca Bacchiocchi, Barrie VanBrackle, Nima H. Mohebbi, and Deric Behar One of the most promising benefits of digital assets is the ability to move value … Continue Reading

President Biden Issues Executive Order on Digital Assets

The order directs federal agencies to focus on six priority areas within the digital asset sector and potential development of a US CBDC. By Alan W. Avery, Yvette D. Valdez, Stephen P. Wink, Pia Naib, Adam Bruce Fovent, and Deric Behar On March 9, 2022, President Biden issued an Executive Order on Ensuring Responsible Development … Continue Reading

SEC Proposes to Expand the Definition of an “Exchange”

The proposal would require certain systems and platforms currently not subject to any registration requirements to register as broker-dealers and ATSs. By Stephen P. Wink, Marlon Q. Paz, Naim Culhaci, and Deric Behar On January 26, 2022, the Securities and Exchange Commission (SEC) issued a set of proposed amendments (Proposal) regarding the regulation of alternative … Continue Reading

Hong Kong’s New Crypto Regulatory Framework to Facilitate Greater Institutional Participation

Regulators released comprehensive guidance to banks, intermediaries, and insurers on virtual asset-related activities. By Simon Hawkins and Adrian Fong On 28 January 2022, Hong Kong’s principal financial services regulators issued much-anticipated guidance to banks, securities firms, and insurers looking to undertake activities related to virtual assets (VAs). In particular: The Hong Kong Monetary Authority (HKMA) issued … Continue Reading

Federal Reserve Takes Measured Approach to Central Bank Digital Currency

In a long-awaited paper, the FRB continues its exploratory approach and emphasizes the need for congressional support. By Alan W. Avery, Pia Naib, and Deric Behar On January 20, 2022, the Board of Governors of the Federal Reserve System (FRB) published its long-awaited discussion paper (the Paper) on the potential benefits and risks of issuing … Continue Reading

The Limits of Applying Reves v. Ernst & Young to DeFi and the Perils of Regulating Web3 by Enforcement

The SEC’s reliance on a nebulous US Supreme Court decision raises important questions for the future of decentralized finance. By Benjamin Naftalis, Douglas K. Yatter, and Peter E. Davis Reves v. Ernst & Young,[1] a 30-year-old US Supreme Court decision on farmers’ co-ops, is garnering attention in the Web3[2] world, specifically in the context of … Continue Reading

2021 Digital Asset Regulatory Lookback (US Edition)

Popular and institutional interest in digital assets, decentralized applications, NFTs, and blockchain technology skyrocketed, and regulators sprinted to catch up. By Todd Beauchamp, Yvette D. Valdez, Stephen P. Wink , Adam Bruce Fovent, Adam Zuckerman, and Deric Behar For the digital asset markets, 2021 was a banner year. Among the milestones: •  Bitcoin prices hit … Continue Reading

Hong Kong Monetary Authority Consults on Stablecoin Regulation

The HKMA’s discussion paper seeks feedback on its proposed regulatory approach to stablecoins, with responses due by 31 March 2022. By Simon Hawkins and Adrian Fong On 12 January 2022, the Hong Kong Monetary Authority (HKMA), Hong Kong’s principal regulator for banks and payment systems, published a discussion paper seeking the public’s views on its … Continue Reading

UK to Regulate Cryptoasset Promotions

HM Treasury has confirmed that it will bring certain unregulated cryptoassets within scope of the financial promotions regime. By Stuart Davis, Rob Moulton, and Charlotte Collins On 18 January 2022, the UK government confirmed its intention to bring the promotion of certain cryptoassets into scope of regulation. HM Treasury has been considering for some time … Continue Reading

Singapore: MAS Issues Guidelines on Promoting Digital Payment Token Services

The guidelines set out the MAS’ expectation that digital payment token service providers should not promote their services to the general public in Singapore. By Simon Hawkins, Farhana Sharmeen, and Tan Gen Huong On 17 January 2022, the Monetary Authority of Singapore (the MAS) issued new guidelines (the Guidelines) setting out restrictions on the promotion … Continue Reading

US Infrastructure Law: Top Impacts on the Digital Asset Industry

The industry will have two years to learn the new requirements and develop systems to ensure compliance. By Elena Romanova, Stephen P. Wink, Adam Zuckerman, and Deric Behar On November 15, 2021, President Biden signed the US$1.2 trillion Infrastructure Investment and Jobs Act into law (the Law). Two provisions of the Law could have a … Continue Reading

PWG Issues Clarion Call for US Legislation on Stablecoins

The report addresses the market risks and regulatory challenges presented by stablecoins and urges Congress to act quickly. By Alan W. Avery, Yvette D. Valdez, Stephen P. Wink, Pia Naib, and Deric Behar On November 1, 2021, the President’s Working Group on Financial Markets (PWG) in conjunction with the Federal Deposit Insurance Corporation (FDIC) and … Continue Reading

DOJ and Treasury Take Crypto Enforcement to the Next Level

The DOJ’s National Cryptocurrency Enforcement Team and Treasury’s OFAC are setting their sights on cryptocurrency use in cybercrimes. By Benjamin A. Naftalis, Eric S. Volkman, Douglas K. Yatter, Nima H. Mohebbi, Jessie R. Michelin, and Deric Behar The US Department of Justice (DOJ) is sharpening its focus on combatting cryptocurrency use in criminal activity. On … Continue Reading

BIS Issues Consultation on Stablecoin Regulation

The global central bank cooperative body envisions stablecoins within the context of international standards for payment, clearing, and settlement systems. By Alan W. Avery, Stuart Davis, Simon Hawkins, Stephen P. Wink, Pia Naib, and Deric Behar Among the different types of digital assets, global authorities seem most focused on stablecoins. This concern is the result … Continue Reading

The Token Safe Harbor Lands on Capitol Hill

The Clarity for Digital Tokens Act of 2021 would give token issuers the guardrails they need to innovate with far less regulatory anxiety. By Stephen P. Wink and Deric Behar US Securities and Exchange Commission (SEC) Commissioner Hester Peirce has always been something of a maverick. She has been a lone dissenting voice on the … Continue Reading

New US Digital Assets Bill Casts Wide Net

An ambitious proposal could bring digital assets into the mainstream regulatory fold. By Yvette D. Valdez, Stephen P. Wink, Adam Bruce Fovent, Adam Zuckerman, and Deric Behar During an eventful summer for the digital assets industry, it may have been easy to miss US Representative Don Beyer’s introduction of the Digital Asset Market Structure and … Continue Reading
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