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
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
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
Latham lawyers discuss the state of the crypto industry and the challenges for companies. Turbulent market conditions are presenting novel challenges for companies in the cryptocurrency space. What are the factors contributing to the downturn, the implications for companies, and the legal rights and remedies that companies may have? Restructuring & Special Situations Practice partners … Continue Reading
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
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
A sovereign nation’s decision to adopt Bitcoin as legal tender raises interesting questions — and legal ramifications. By Elena Romanova, Larry Safran, Yvette D. Valdez, Eric S. Volkman, Stephen P. Wink, Adam Bruce Fovent, and Deric Behar On June 8, 2021, El Salvador’s Legislative Assembly voted to establish Bitcoin as unrestricted legal tender, making El … Continue Reading
As the market heats up for art-related NFTs, buyers should be aware of limitations on their rights to use those works. By Ghaith Mahmood, Jordan Naftalis, and Veronica Ye The convergence of blockchain technology and creative intellectual property (IP) through a non-fungible token (NFT) is having a mainstream moment. Media stories abound with reports of … Continue Reading
As the market for NFTs heats up, market participants should remain mindful of the regulatory implications of complex schemes. By Stephen P. Wink, Miles P. Jennings, Shaun Musuka, and Deric Behar As the current crypto boom has progressed, it seemed Decentralized Finance (DeFi) had cemented its position as the dominant new narrative of this cycle. … Continue Reading
A new proposal would subject financial institutions and exchanges to onerous recordkeeping and reporting requirements for certain digital currency transactions. By Miles P. Jennings, Benjamin A. Naftalis, Eric S. Volkman, Margaret Allison Upshaw, and Deric Behar In a surprise release in the waning days of the Trump administration, the Financial Crimes Enforcement Network (FinCEN) division … Continue Reading
Hong Kong’s Securities and Futures Commission introduces new licensing regime to regulate previously unregulated markets and restates expectations regarding security token offerings. By Simon Hawkins, Kieran Donovan, and Kenneth Y.F. Hui The second day of Hong Kong Fintech Week again brought together regulators and market participants from across the fintech industry for a range of … Continue Reading
US Department of Justice’s sprawling report reveals regulatory enforcement priorities for cryptocurrencies and highlights multi-agency cooperation. By Susan Engel, Miles Jennings, Benjamin Naftalis, Yvette Valdez, Eric Volkman, Stephen Wink, Douglas K. Yatter, and Deric Behar On October 8, 2020, the US Attorney General’s Cyber-Digital Task Force of the Department of Justice (DOJ) published an extensive … Continue Reading
The proposed regulation will provide greater consumer and investor protection and lessen the risks of participating in digital finance. By Stuart Davis The EU Commission has published a proposal for a wide-ranging EU regulation covering cryptoassets and e-money tokens, both of which are currently largely unaddressed in EU financial services legislation. The draft Markets in … Continue Reading
Andrew Bailey outlined what payments market participants can expect from regulators seeking to address financial stability risk in the world of payments, including as part of the rise and adoption of global stablecoins. By Brett Carr and Stuart Davis On 3 September 2020, the Governor of the Bank of England (BoE) Andrew Bailey delivered a … Continue Reading
The long-awaited guidance clarifies the application of the “actual delivery” exception to leveraged virtual currency transactions with retail purchasers. By Yvette D. Valdez, J. Ashley Weeks, and Deric Behar Earlier this year, the US Commodity Futures Trading Commission (CFTC) approved final interpretive guidance (Guidance) concerning retail commodity transactions involving certain digital assets. The Guidance clarifies … Continue Reading
SEC’s motion for a preliminary injunction is granted, prohibiting delivery of Telegram tokens to purchasers. By Stephen P. Wink, Shaun Musuka, Carolina Bernal and Deric Behar On March 24, the Court in the Southern District of New York sided with the SEC and granted an injunction prohibiting Telegram Group Inc. and TON Issuer Inc. (together, Telegram) from delivering … Continue Reading
Global monetary authorities and financial regulators have responded forcefully to the advent of privately developed global stablecoins. By Todd Beauchamp, David L. Concannon, Stephen P. Wink, Simon Hawkins, Stuart Davis, and Deric Behar A new report highlights the risks of global stablecoins and enumerates the legal, regulatory, and oversight hurdles a global stablecoin must clear … Continue Reading
The IRS has published a Revenue Ruling and FAQs clarifying some long-standing virtual currency questions. By Brian C. McManus, Elena Romanova, Stephen P. Wink, Sam (Seung Hyun) Yang, and Deric Behar On October 9, 2019, the US Internal Revenue Service (IRS) issued its first guidance on the tax treatment of cryptocurrencies in at least five … Continue Reading
The regulators attempt to clarify their position on the possible custody of digital assets by broker-dealers, but questions remain. By Stephen P. Wink, Cameron R. Kates, Shaun Musuka, and Deric Behar The SEC and FINRA recently released a joint staff statement (Joint Statement) addressing the custody of digital asset securities by broker-dealers. For some time, … Continue Reading
FinCEN’s guidance clarifies the applicability of the BSA to a variety of virtual currency businesses. By Todd Beauchamp, Charles Weinstein, Loyal T. Horsley, Cameron R. Kates, and Shaun Musuka On May 9, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued interpretive guidance expanding on previously issued guidance and rulings regarding the … Continue Reading
The online document generator helps startups raise capital with customizable market standard terms and optional digital token provisions. By David L. Concannon, Yvette D. Valdez, Stephen P. Wink, Miles P. Jennings, and Shaun Musuka In collaboration with ConsenSys and OpenLaw, Latham & Watkins recently launched the Automated Convertible Note Generator, a complimentary tool designed to … Continue Reading
Federal legislators introduce two bills in an attempt to provide the blockchain economy with regulatory certainty. By Stephen P. Wink, Morgan E. Brubaker, Cameron R. Kates, and Shaun Musuka US regulators and federal legislators may be heeding the calls of crypto-enthusiasts for legal clarity regarding the status of digital assets and cryptocurrencies (collectively, Tokens). Two … Continue Reading
The new legislation may act as a catalyst for a crypto-evolution within Russian law. By Andrew C. Moyle and Elizaveta Bacheyeva On 18 March 2019, the Russian legislator took the first step in introducing the Russian civil law system to the new universe of digital assets. The Russian Civil Code was amended to include concepts … Continue Reading
The SEC provides additional guidance for analyzing whether a digital asset is a security. By Stephen P. Wink, Cameron R. Kates, and Shaun Musuka On April 3, 2019, the U.S. Securities and Exchange Commission’s Strategic Hub for Innovation and Financial Technology (the SEC) released a framework (the Framework) for assessing whether a blockchain-issued token or … Continue Reading
