Responsible Financial Innovation Act

The RFIA could ease tax compliance burdens for parties transacting in digital assets and defer or eliminate tax on some transactions.

 By Jiyeon Lee-Lim, Elena Romanova, Ted Gkoo, and Jacob Nagelberg

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 fifth post in the series covers taxation issues.

Taxation

Taxation issues are covered in Title II of the bill (Responsible Taxation of Digital Assets), which incorporates the new definitions for digital asset and virtual currency provided for in Title I of the bill (see discussion in this previous post).

The RFIA would modify the Internal Revenue Code (the Code) to provide new rules and extend certain existing rules to cover digital assets. It would also require that the Internal Revenue Service (IRS) issue guidance on several topics frequently requested by the digital asset industry.

The RFIA could make it easier for fintechs dealing in digital assets and stablecoins to access Federal Reserve bank services.

 By Alan W. AveryPia 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 CFTC would take center stage in the regulation of spot digital asset markets under Title IV of the RFIA.

 By Yvette D. Valdez, Adam Bruce Fovent, and Emily Viola

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 third post in the series covers CFTC and commodities regulatory issues.

Title IV of the Responsible Financial Innovation Act ( RFIA) is arguably the keystone of the proposed regulatory framework and would make various amendments to the Commodity Exchange Act (CEA), ultimately giving the Commodity Futures Trading Commission (CFTC) principal regulatory authority over digital asset markets.

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.

The RFIA would enact a rebuttable presumption that an ancillary asset in connection with an investment contract is a commodity.

By Marlon Q. Paz, Stephen P. Wink, Jenny Cieplak, 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 first post in the series covers SEC and securities issues.

Securities issues are covered in Title III (Responsible Securities Innovation) of the Responsible Financial Innovation Act (RFIA). The RFIA would add a new Section 41 to the Securities Exchange Act of 1934 (Securities Offerings Involving Certain Intangible Assets) that would provide much-needed statutory clarity on the allocation of regulatory jurisdiction over 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 Banking Committee and Kirsten Gillibrand from the Senate Agriculture Committee introduced legislation to create a framework for digital assets, cryptocurrency, and blockchain technology. The much-anticipated bipartisan bill, titled the Responsible Financial Innovation Act (RFIA), is the most ambitious digital asset bill yet put forward to Congress, and covers a broad range of topics. The legislation is designed to balance innovation and responsibility, and seeks to safely integrate digital assets into the existing regulatory fold through definitional and jurisdictional clarity.