United States

CFTC seeks public comment on crypto-asset mechanics and markets

The Commodity Futures Trading Commission (“CFTC”) published a Request for input on December 17, 2018, seeking public comment and feedback on a set of twenty-five (25) questions to better inform the CFTC’s understanding of the technology, mechanics, and markets for virtual currencies beyond Bitcoin. … Continue Reading

Banking agencies and FinCEN encourage innovative efforts by banks to combat money laundering and terrorist financing

By Kathleen Scott (US) on December 14, 2018 Posted in Banking, Enforcement, Fintech, General, Money laundering, Regulation and compliance, United States

On December 3, 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Financial Crimes Enforcement Network (“FinCEN”), (collectively, the “Agencies”) issued a joint statement (“Joint Statement”) urging banks to consider, evaluate and potentially implement … Continue Reading

US economic sanctions also affect non-US companies

By Stephen McNabb (US), Paul Sumilas (US), Kim Caine (US) and Kathleen Scott (US) on December 10, 2018 Posted in Enforcement, General, Regulation and compliance, United States

Over the last few months, US economic sanctions have taken the front pages as the Trump Administration has reinstated certain sanctions aimed at Iran following the United States withdrawal from the Joint Comprehensive Plan of Action (“JCPOA”). While the so-called “snapback” reinstated sanctions provisions increase the risk for non-US companies, recent enforcement actions against non-US … Continue Reading

US Federal Banking Agencies issue Community Bank Leverage Ratio proposal

By Mike Keeley (US), Justin Long (US), Kathleen Scott (US) and Richard Potomac (US) on November 29, 2018 Posted in Banking, Capital adequacy, General, Regulation and compliance, United States

On November 21, 2018, the Office of the Comptroller of the Currency (the “OCC”), the Board of Governors of the Federal Reserve System (the “Board”), and the Federal Deposit Insurance Corporation (the “FDIC”) (collectively, the “Federal Banking Agencies” or the “Agencies”) jointly issued a notice of proposed rulemaking (the “NPR” or the “Proposal”) that would … Continue Reading

SEC issues statement on digital asset securities issuance, investment and trading

By Andrew Lom (US) and Rachael Browndorf (US) on November 21, 2018 Posted in Enforcement, Fintech, General, Regulation and compliance, Securities, United States

On November 16, 2018, the Securities and Exchange Commission (“SEC”) issued a statement on the application of federal securities laws to the issuance and trading of, and investment in, digital asset securities. While the statement encourages technological innovations that benefit investors and capital markets, it emphasizes that market participants must still adhere to federal securities … Continue Reading

CFTC adopts $8 billion threshold for swap dealer de minimis exception

By Lillian A. Cardona (US) on November 20, 2018 Posted in Commodities & Derivatives, General, Regulation and compliance, United States

On November 13, 2018, the CFTC published its Final Rule (Final Rule) setting its de minimis exception threshold to swap dealer registration and regulation requirements at an aggregate gross notional amount (“AGNA”) threshold of $8 billion in swap dealing activity. Under the de minimis exception as originally adopted, a person would not be deemed … Continue Reading

SEC announces first enforcement action against EtherDelta for operating an unregistered exchange for ERC20 digital tokens

By Kevin Harnisch (US), Andrew Lom (US), Rachael Browndorf (US), Christopher Cash (US) and Lillian A. Cardona (US) on November 19, 2018 Posted in Enforcement, Fintech, General, Regulation and compliance, United States

On November 8, 2018, the Securities and Exchange Commission (“SEC”) announced that it settled charges against Zachary Coburn, founder of EtherDelta, a digital token trading platform, for operating an unregistered national securities exchange. This is the SEC’s first enforcement action based on findings that a digital token trading platform operated as an unregistered national securities … Continue Reading

Iranian sanctions re-imposed and in full effect

By Kathleen Scott (US) on November 14, 2018 Posted in Banking, Enforcement, General, Money laundering, Regulation and compliance, United States

As of November 5, 2018, all of the US sanctions that were lifted or waived in connection with the Joint Comprehensive Plan of Action (JCPOA), the 2016 nuclear deal among the United States and its allies and Iran, have been re-imposed and are in full effect. As a result, non-US companies can be subject to … Continue Reading

What auditors need to know about the blockchain

By Kathleen Scott (US) on November 14, 2018 Posted in Fintech, General, United States

Yet another U.S. regulator has weighed in on the use of the blockchain. The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation established by the U.S. Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate and independent audit reports. The PCAOB … Continue Reading

Alibaba successful in temporarily shutting down third party using its name to sell “AlibabaCoin”

By Susan Ross (US) and Kathleen Scott (US) on November 6, 2018 Posted in Fintech, General, United States

On October 22, 2018, a U.S. federal trial court in Manhattan granted web services conglomerate Alibaba Group Holding Limited’s request for a preliminary injunction against several defendants that were offering cryptocurrency for sale, under the name “AlibabaCoin.” (Alibaba Group Holding Ltd. v. Alibabacoin Foundation, No. 18-CV-2897 (JPO) (S.D.N.Y. Oct. 22, 2018) Although neither Alibaba nor … Continue Reading

Conference of State Bank Supervisors files Federal lawsuit to stop OCC fintech charter

By Kathleen Scott (US) and Richard Potomac (US) on October 29, 2018 Posted in Banking, Fintech, General, Regulation and compliance, United States

On October 25, 2018, the Conference of State Bank Supervisors (“CSBS”) filed a lawsuit in the U.S. District Court for the District of Columbia against the Office of the Comptroller of the Currency (“OCC”) seeking to stop the OCC from issuing any special-purpose national bank charters to financial technology companies that do not receive deposits … Continue Reading

The last SIFI falls

By Kathleen Scott (US) on October 22, 2018 Posted in Dodd-Frank, General, Regulation and compliance, United States

On October 17, 2018, the U.S. Treasury Department announced that the Financial Stability Oversight Council (FSOC) had lifted its designation of Prudential Financial Inc. as a systemically important financial institution (SIFI). The decision was unanimous, with Securities and Exchange Commission (SEC) Commissioner Elad Roisman voting on delegated authority due to the recusal of SEC Chair … Continue Reading

CFTC Commissioner Brian Quintenz warns smart contract code developers may be held liable for violations of CFTC regulations

By Andrew Lom (US), Lillian A. Cardona (US) and Rachael Browndorf (US) on October 19, 2018 Posted in Commodities & Derivatives, Enforcement, Fintech, General, Regulation and compliance, United States

On October 16, 2018, Commissioner Brian Quintenz of the Commodity Futures Trading Commission (“CFTC”) shared his views on smart contract regulation by the CFTC. In his speech at the 38th Annual GITEX Technology Week Conference, in discussing a hypothetical where code in a smart contract was specifically designed to enable a type of activity regulated … Continue Reading

Can cryptocurrency be used to post bail?

By Kathleen Scott (US) on October 19, 2018 Posted in Fintech, General, United States

An interesting issue arose recently when a defendant was arrested on federal charges of stealing $342,000 worth of digital assets, and tried to post bond using cryptocurrency. Sue Ross has written a post for our Brand Protection Blog that includes a discussion of the case and whether the FBI permitted the defendant to post bail … Continue Reading

CFTC announces proposed rule to streamline certain regulations for commodity pool operators and commodity trading advisors

By Andrew Lom (US), Joseph Williams (US) and Lillian A. Cardona (US) on October 11, 2018 Posted in United States

On October 9, 2018, the Commodity Futures Trading Commission (“CFTC”) proposed changes to the registration and compliance obligations for commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) consistent with relief currently provided by various staff letters and advisories. Comments are due sixty (60) days after the proposed rule is published in the Federal Register. … Continue Reading

Regulators bring enforcement actions against 1pool Ltd.

By Andrew Lom (US) and Rachael Browndorf (US) on October 8, 2018 Posted in Commodities & Derivatives, Enforcement, Fintech, General, Regulation and compliance, Securities, United States

On September 27, 2018, both the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) filed charges against Marshall Islands-based firm 1pool Ltd. (“1pool”) and its Austria-based CEO and owner, Patrick Brunner, for (i) failing to register as a security-based swaps dealer with the SEC, (ii) failing to register as a futures … Continue Reading

CFTC Chair hails the accomplishments of the past year’s enforcement program

By Joseph Williams (US), Anna Biegelsen (US) and Lillian A. Cardona (US) on October 4, 2018 Posted in Commodities & Derivatives, Enforcement, General, Regulation and compliance, United States

On October 2, 2018, Commodity Futures Trading Commission (“CFTC”) Chairman J. Christopher Giancarlo spoke before the Economic Club of Minnesota, giving a detailed overview of the CFTC’s enforcement program for fiscal year 2017 (Oct. 2017 – Sept. 2018), entitling his remarks “Regulatory Enforcement & Healthy Markets: Perfect Together!” The CFTC’s enforcement program filed 83 actions … Continue Reading

CFTC’s Giancarlo’s Cross-Border White Paper 2.0 signals upcoming rule proposals to replace cross-border guidance

By Joseph Williams (US), Anna Biegelsen (US) and Lillian A. Cardona (US) on October 1, 2018 Posted in Commodities & Derivatives, Dodd-Frank, Enforcement, General, Regulation and compliance, United States

On October 1, 2018, the Commodity Futures Trading Commission’s (“CFTC”) Chairman, J. Christopher Giancarlo released a White Paper entitled, “Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S. Regulation” (“Cross-Border White Paper 2.0”). Chairman Giancarlo intends to direct the CFTC staff to put forth new rule proposals, which if adopted, would … Continue Reading

New York Attorney General issues report on cryptocurrency platforms

By Susan Ross (US) and Kathleen Scott (US) on September 28, 2018 Posted in Fintech, General, Regulation and compliance, United States

On September 18, 2018, the New York State Attorney General issued a 32- page report on its findings on the state of cryptocurrency platforms with respect to consumer protections. The Virtual Markets Integrity Initiative Report summarizes the results of the New York Attorney General’s April 2018 survey sent to 13 cryptocurrency platforms, including some located … Continue Reading

Cryptocurrencies held subject to US federal securities laws

By Kathleen Scott (US) on September 27, 2018 Posted in Fintech, General, Regulation and compliance, Securities, United States

For the first time, a US federal court has ruled that in appropriate circumstances cryptocurrencies can be subject to the provisions of US securities laws. In U.S. v. Zaslavskiy, No. 1:17-cr-00647, slip op., 2018 WL 4346339 (E.D.N.Y. Sept. 11, 2018), Judge Raymond Dearie of the Eastern District of New York upheld a criminal indictment for … Continue Reading

Latest issue of Global Asset Management Quarterly now available

By Kathleen Scott (US) on September 20, 2018 Posted in Asset management, Fintech, General, United States

The tenth edition of our Global Asset Management Quarterly is now available. You can also register to automatically receive each issue as it is released. This publication highlights key developments that will be of interest to, and affect, our asset management clients, including market trends and developments in tax and buy-side regulation globally. Articles in … Continue Reading

New York State Department of Financial Services again sues OCC over bank charter for fintechs

By Kathleen Scott (US) and Richard Potomac (US) on September 19, 2018 Posted in Banking, Fintech, General, Retail, United States

On September 14, 2018, New York State Department of Financial Services (“DFS”) Superintendent Maria T. Vullo filed a lawsuit against the Office of the Comptroller of the Currency (“OCC”) in connection with the OCC’s recent decision to begin accepting applications from nondepository financial technology companies (“fintechs”) for special purpose national bank charters (the OCC’s “Fintech … Continue Reading

US federal banking agencies issue final regulations promulgating use of municipal obligations for LCR compliance

By Kathleen Scott (US) on September 11, 2018 Posted in Banking, Capital adequacy, General, Regulation and compliance, United States

Late last month, the US federal banking agencies (the Federal Reserve Board (FRB), Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC), collectively, the “banking agencies”) issued an interim final rule that implements section 403 of the recently enacted “Economic Growth, Regulatory Relief, and Consumer Protection Act” (the “Act”), to … Continue Reading

CFPB finalizes GLBA privacy rule exemption

By Kathleen Scott (US) and Rachael Browndorf (US) on August 28, 2018 Posted in Banking, General, Regulation and compliance, Retail, United States

On August 10, 2018, the Bureau of Consumer Financial Protection (the “Bureau”) announced that it had finalized amendments to the Gramm-Leach-Bliley Act (“GLBA”) regulations implementing a statutory change that provides an exemption for certain financial institutions from the GLBA requirement to deliver an annual privacy notice to their customers. As discussed in our post from … Continue Reading