The resource aims to provide a comprehensive, voluntary framework to enhance transparency in the digital assets market and enable informed decision-making for potential buyers.
Stakeholders have until January 31, 2025, to submit comments on the “Proposed Information Guidelines for Certain Tokens Made Available in the United States” (the Guidelines), which were published last month by a select group of legal and business experts in the area of digital assets and blockchain.
The Guidelines aim to
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 Structures for Customer Protection in the Event of Insolvency (the Guidance). It guides virtual currency entities (VCEs)
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 publishing firm LBRY, Inc. The US District Court for the District of New Hampshire (the Court) considered the
Unpacking three key competition issues for digital asset innovators and investors: M&A, interlocking directorates, and interoperability.
By Kelly Fayne, Anna Rathbun, and Evan Omi
In a sea of regulatory hurdles and issues, antitrust and competition laws may be low on the list of concerns of digital asset innovators and investors. But competition in the digital asset space is front of mind for key industry regulators. On October 24, 2022, SEC Chair Gary Gensler noted in a speech at
The RFIA could make it easier for fintechs dealing in digital assets and stablecoins to access Federal Reserve bank services.
By Alan W. Avery, Pia Naib, and Deric Behar
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. This fourth post in the series covers banking and payment stablecoin issues.
The SFC issued a statement to clarify its regulatory approach in relation to non-fungible tokens and remind investors of related risks.
By Simon Hawkins, Farhana Sharmeen, Adrian Fong, Gen Huong Tan and Shirley Wong
On 6 June 2022, the Hong Kong Securities and Futures Commission (SFC) issued a statement drawing attention to the risks associated with investing in non-fungible tokens (NFTs) and summarising the legal and regulatory requirements applicable to NFTs.
This follows recent guidance from Hong Kong’s banking, securities, and insurance regulators to financial institutions looking to undertake virtual asset activities (see Latham’s Client Alert Hong Kong’s New Crypto Regulatory Framework to Facilitate Greater Institutional Participation). Together, the statement and guidance demonstrate that the regulators are continuing to look closely at the digital asset space.
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 decentralized autonomous organization (DAO), the DAO’s two individual co-founders, two limited liability corporations (LLCs) that invested in the DAO and participated in its governance, and several other associated entities. DAOs are (in theory) organizations without a centralized leadership structure like traditional corporations or other limited liability entities. Their governance is generally driven by the coded terms of smart contracts maintained on a blockchain ledger, rather than top-down by a management team. And rather than having a hierarchy of control, DAO stakeholders with tokenized voting rights are typically considered “equals” in which one token equals one vote.
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 over the global internet nearly instantaneously, in immutably recorded transactions. For many people in warzones or geographies with limited access to banking or payment card infrastructure, this capability is critical and can often be life-saving.
The new law establishes the Dubai Virtual Assets Regulatory Authority and identifies activities to be regulated, such as operating virtual asset platforms.
By Andrew Moyle, Ksenia Koroleva, and Matthew Rodwell
On March 11, 2022, Dubai Law No. 4 of 2022 on the Regulation of Virtual Assets in the Emirate of Dubai (Virtual Assets Law) was published in the Official Gazette of the Government of Dubai. The new law is a landmark piece of legislation for Dubai, which aims to become one of the leading jurisdictions for virtual assets.
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 protocol-driven decentralized finance (DeFi).[3] The case popped up in recent speeches by senior Securities and Exchange Commission (SEC) officials, including congressional testimony of SEC Chair Gary Gensler,[4] and featured in one of the SEC’s latest moves in crypto enforcement — an August 2021 action against a company called DeFi Money Market (DMM).[5] These developments raise several important questions. What is the relevance and application of the Reves four-factor test? How does it apply (or not apply) to Web3 generally and DeFi specifically? Most importantly, does it give the SEC broad authority to regulate DeFi?