Last week we reported that FinCEN had issued new guidance addressing cryptocurrency and other convertible virtual currency. The need for compliance was reinforced this week. In a speech by Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence, during blockchain week in NY, a stern warning was issued. The message was clear. Regulatory compliance is not an option and you must do it right from the start – not just after you got a call from regulators or law enforcement.
Continue Reading FinCEN – We Will Identify Where Compliance Is Not Taking Place And Take Appropriate Action

FinCEN has issued  2 new guidance documents addressing cryptocurrency and other convertible virtual currency (CVC). The guidance does not establish any new regulatory expectations. Rather, it consolidates current FinCEN regulations, guidance and administrative rulings that relate to money transmission involving virtual currency, and applies the same interpretive criteria to other common business models involving CVC. FinCEN’s rules define certain businesses or individuals involved with CVCs as money transmitters subject to the same registration requirements and a range of anti-money laundering, program, recordkeeping, and reporting responsibilities as other money services businesses. It also warns of threats posed by virtual currency misuse.
Continue Reading FinCEN Updates Guidance on Crypto

The use of blockchain (or distributed ledger) technology for games (a.k.a blockchain games) and token-based digital collectibles is on the rise. The overnight popularity of CryptoKitties was as significant to raising the awareness of digital collectibles as Pokémon Go was to location-based AR games. However, the ecosystem extends well beyond CryptoKitties, and is growing rapidly. The ecosystem includes cross-platform crypto currency and tokens, digital asset marketplaces, digital collectibles, decentralized virtual worlds and more. A significant amount of investment is going into this space. Blockchain gaming startup Forte has announced a deal with Ripple’s Xpring crypto currency platform to invest $100 million in game developers who make games based on blockchain technology. While the opportunities in this space are real, there are a number of legal issues that can arise depending on how a company implements its offerings.
Continue Reading Blockchain Games and Collectibles – Patents and Other Legal Issues

Blockchain applications for healthcare have garnered significant attention recently. For example, as we recently blogged, five major healthcare companies – Humana, MultiPlan, Optum, Quest Diagnostics, and UnitedHealthcare – formed the Synaptic Health Alliance (the “Alliance”) to explore how blockchain technology could resolve current healthcare issues.
Continue Reading How Blockchain Technology Brings Value to Healthcare

In 2018, five major healthcare companies – Humana, MultiPlan, Optum, Quest Diagnostics, and UnitedHealthcare – formed the Synaptic Health Alliance (the “Alliance”) to explore how blockchain technology could resolve current healthcare issues. The Alliance launched its first pilot program in April 2018 to focus on specific ways that “blockchain technology can help ensure the most current information about healthcare providers is available in the provider directories maintained by health insurers.”[1] Aetna and Ascension joined the Alliance in December 2018, thus adding additional resources and unique perspectives to the effort of streamlining provider data management.[2]
Continue Reading The Synaptic Health Alliance: A Look at how Blockchain Technology Could Improve Provider Data Quality

The use of digital securities or security tokens has coincided with the explosion of crypto-currencies and efforts to establish Internet-traded coins or tokens with utility as a form of currency. Lost amidst the enthusiasm over the revolutionary implications of crypto-currencies is the simple fact that security tokens which use block-chain technology and smart contracts have significant advantages over traditional platforms for issuing, holding and trading securities.
Continue Reading Security Tokens — A Superior Platform for Securities Holding and Trading

Smart contracts, also referred to as chaincode in the Hyperledger world, are one of the most powerful aspects of blockchain and Distributed Ledger Technology (DLT). This “self-executing” code can receive various inputs and, based on “if-then” logic encoded therein, can take various actions and update the ledger state.

Based on recent actions by U.S. regulators, smart contract developers need to be aware of potential liabilities that they may face (beyond the usual issues with software development).
Continue Reading Smart Contract Developers – Beware and Lawyer Up!

Christie’s made history again last night during its evening sale, An American Place: The Barney A. Ebsworth Collection, at 20 Rockefeller Center in New York. This time, the history was not in the form of a record-setting sale (though the sale brought in $317.8 million), but as the first major art auction to be recorded by distributed ledger technology. Christie’s teamed with Artory, a company that operates an art-focused, blockchain-based registry, to securely register and track the provenance of over 90 artworks that were offered in the sale.
Continue Reading The Hammer Falls on the First Major Blockchain-based Art Auction

A version of this article originally appeared on Law360 on November 7, 2018.

Blockchain technology and smart contracts have the potential to become major disrupters in the energy industry. For example, these technologies may accelerate the automation of some or all aspects of the electricity delivery transaction chain and allow for more decentralized, efficient electricity markets. Further, these technologies may allow end users (such as homeowners) to play a more active role in the electricity markets beyond simply relying on their local utility company to supply their electricity demand. Thus, blockchain technology could fundamentally change the way electricity is supplied and consumed in wholesale (i.e., the sale of electricity for resale) and retail (i.e., the sale of electricity to an end user) markets in the coming decade.

As these technologies advance and become more widespread (i) users of such technologies must be cognizant of the various regulatory requirements that could apply to them, (ii) state and federal regulators need to update regulatory practices that are obsolete or impede the use of these technologies in the electricity industry, and (iii) traditional incumbent utilities should consider ways in which they can leverage these technologies.

Continue Reading Considering Blockchain In The Electricity Industry

Over the past couple of years, the crypto industry has come under heavy scrutiny from skeptical regulators seeking to root out fraud and protect investors amid the initial coin offering boom that generated over $4 billion in 2017. However, this skepticism is starting to give way to a more business-friendly attitude.

Crypto firms have made notable headway with regulators in recent months, securing authorizations to act as custodians of digital assets and working towards approval of the first bitcoin-based exchange traded fund (“ETF”). These developments may reflect an evolving collaborative environment that bodes well for the future of blockchain-based innovations.
Continue Reading Crypto Firms Make Inroads with State and Federal Regulators