On Friday, January 12th, during an appearance at The Economic Club in Washington, D.C.  United States Treasury Secretary Steven Mnuchin announced that the Financial Stability Oversight Council (FSOC) was forming a virtual currency working group.  The announcement follows FSOC’s discussion of virtual currency issues, including “price volatility, investor protection and the potential for illicit use”, and commitment to continue reviewing these risks at its meeting in December.[1]

In his remarks to The Economic Club, Secretary Mnuchin emphasized that Treasury was concerned about the potential for money laundering and the risk to consumers investing in virtual currencies. 
Continue Reading Secretary Mnuchin Announces FSOC Working Group to Combat Money Laundering and Speculative Risks in Virtual Currencies

Following the December 2017 listing of futures contracts based on Bitcoin by two exchanges regulated by the Commodity Futures Trading Commission (CFTC), several fund sponsors and securities exchanges applied to the Securities and Exchange Commission (SEC) to list exchange-traded funds (ETFs) that would invest in those futures contracts.[1]  By investing in futures contracts regulated by the CFTC, instead of Bitcoin itself, these ETFs seemed designed to address concerns that had previously led the SEC to deny applications to list ETFs linked to Bitcoin.  This change was not sufficient, however, as the SEC raised new concerns in early January that led to the withdrawal of these new applications.[2]   Exchanges, ETF sponsors and investors are now left wondering:  what will it take for an ETF linked to Bitcoin to pass muster with the SEC?
Continue Reading SEC Requests Withdrawal of Bitcoin Futures ETFs

On January 4, 2018, the North American Securities Administrators Association (NASAA) released an investor reminder regarding the risks associated with cryptocurrencies, initial coin offerings (ICOs), and cryptocurrency-related investment products.  In the warning, the NASAA described factors that investors should consider before making investments in cryptocurrencies and cryptocurrency-related investment products, as well as common red flags of investment fraud.
Continue Reading Regulators Remain Focused on Risks Associated with Cryptocurrencies, ICOs, and Cryptocurrency-Related Investment Products

On December 12, 2017, the U.S. District Court for the Southern District of New York dismissed the New York Department of Financial Services’ (NYDFS) suit against the Office of the Comptroller of the Currency (“OCC”) challenging the proposed special purpose national bank for financial technology companies (“OCC FinTech Charter”).  The OCC FinTech Charter would apply a bank regulatory framework to financial technology companies to help ensure that they operate in a safe and sound manner.
Continue Reading U.S. District Court for the Southern District of New York Dismisses NYDFS OCC FinTech Charter Suit

The Securities and Exchange Commission (the “SEC”) recently sent a warning to the burgeoning market for initial coin offerings (“ICOs”): assets that exist only on the blockchain may be securities subject to registration, anti-fraud and other requirements under the U.S. federal securities laws.  The outcome of the SEC’s analysis was unsurprising, representing a reasonably straightforward application of longstanding securities law principles.  However, the SEC’s discussion left several key questions and potential paths forward for ICO issuers and other participants in the ICO marketplace to consider.
Continue Reading Open Questions and Potential Paths Forward Following the SEC’s Analysis of Digital Assets as Securities

On December 2, 2016, Comptroller Thomas J. Curry of the Office of the Comptroller of the Currency (“OCC”) announced that the OCC will move forward with chartering financial technology (“FinTech”) companies that offer bank products and services and meet the OCC’s chartering requirements. However, while encouraging, the announcement, and the OCC paper released with it, left many issues unresolved.

Continue Reading The OCC’s New FinTech National Banking Charter