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The RFIA would define consumer protection standards for digital assets and introduce new requirements regarding digital asset use in interstate money transfers.

By Jenny Cieplak, Parag Patel, Barrie VanBrackle, 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 second post in the series covers consumer protection and state money transmission laws.

Consumer Protection: Disclosures

Consumer Protection issues are covered in Title V of the bill (Responsible Consumer Protections) of the Responsible Financial Innovation Act (RFIA). The RFIA’s customer protection standards are to be enforced by the federal or state licensing, registration, or chartering authority of a digital asset intermediary, or by the appropriate state or federal banking supervisor if a depository institution or other financial institution.

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 Investor Protection Act (the Bill) on July 28, 2021. The Bill is perhaps the most promising effort to date by Congress to enact legislation that would address some of the legal ambiguities for digital assets and better define their place within existing financial regulatory structures.

Rep. Beyer described the current legal landscape for digital assets as “ambiguous and dangerous for investors and consumers.” Broadly, the Bill seeks to address deficiencies and/or ambiguities relating to consumer protection, trade reporting and transparency, and anti-money laundering / know your client (AML/KYC) procedures for digital assets.

The Bill also seeks to address a wide range of practical issues, from the fundamental (such as defining industry terms and categorizing cryptoassets) to the more nuanced (such as establishing standards for transaction reporting and consumer protection and advisories).