Cryptocurrency

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The Office of New York State Attorney General Letitia James (“NYAG”) has filed a lawsuit to shut down technology company Coinseed.  The state has accused the firm of selling unregistered securities in the form of digital tokens and operating as an unregistered broker-dealer while making material misrepresentations about the company, its management team, and fees charged to investors in connection with cryptocurrency trades.
Continue Reading New York Attorney General Sues to Shutter Cryptocurrency Trading Firm Coinseed

FinCEN has issued a notice that it intends to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account under 31 CFR 1010.350. Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign account holding virtual currency as a type of reportable account. (See 31 CFR 1010.350(c)). As a result, the notice indicates that “at this time, a foreign account holding virtual currency is not reportable on the FBAR (unless it is a reportable account under 31 C.F.R. 1010.350 because it holds reportable assets besides virtual currency).”
Continue Reading FinCEN Announces Intention to Require FBAR Reporting of Crypto Currency

The Office of the Comptroller of the Currency (“OCC”) recently signaled its approval for banks to fully wade into the cryptocurrency custodian space.  On in a July 22, 2020 interpretive letter, the OCC concluded that a national bank may provide cryptocurrency custody services on behalf of its customers, including by holding the unique cryptographic keys associated with cryptocurrency, so long as the institution is able to effectively manage the risks and complies with applicable law.
Continue Reading Office of the Comptroller of the Currency Affirms Authority of a National Bank to Provide Cryptocurrency Custody Services

As another example of crypto tokens going mainstream, team Barcelona sold 1.2 million euro worth of fan tokens in less than two hours. The 600,000 tokens were sold at a fixed price of 2 euro, and are tradeable on Socios.com and Chiliz.net. The crypto tokens, called $BAR, provide fans various types of engagement with the team.
Continue Reading Fans Get Kick Out of FC Barcelona’s Crypto-based Fan Token

Key Takeaways

  1. The United States-Mexico-Canada Agreement (USMCA) provides for financial and digital trade regulations that harmonize the treatment of fintech companies.
  2. North American companies leveraging digital assets for payments should consider strategic regional opportunities available under the new USMCA fintech Framework.
  3. The USMCA Parties (member countries) continue to license fintech companies using cryptocurrency and create regulatory sandboxes to incentivize experimentation with the new technology under relaxed regulatory conditions.

Continue Reading The United States-Mexico-Canada Agreement – Paving the Way for a Cross-Border Fintech Sandbox

On May 13, 2020, Financial Crimes Enforcement Network (“FinCEN”) Director Kenneth Blanco delivered remarks to the Consensus Blockchain Conference regarding the agency’s recent observations in connection with virtual currencies, including the current risks of criminal exploitation of virtual currency, significant issues FinCEN anticipates for virtual currencies in the future, and the industry’s compliance with the Travel Rule.
Continue Reading FinCEN Director Addresses COVID-19 Related Virtual Currency Issues at Consensus Blockchain Conference

A Washington state federal court recently addressed claims relating to rates that cryptocurrency mining companies pay for electricity in Grant County, Washington. The court rejected all of the miner’s legal claims. The dispute focused on the rate classification that this utility applied to crypto miners as explained below.  Due to various risks, the electric utility assigned the miners to a newly created rate class referred to as “Evolving Industries,” resulting in a higher rate class for the miners.  The miners were I-“rate” with this decision.
Continue Reading Cryptocurrency Miners I“rate” At Energy Rate Decision

For the first time since 2007, the Recording Industry Association of America is reporting that the United States retail music market is on its way to becoming a $10 billion market. Streaming royalties account for a majority of this growth along with new use cases entering the marketplace. New technologies and content offerings have and continue to drive this growth. Innovation in the music production and distribution spaces lowered the barriers to entry, allowing unsigned artists to create professional recordings and distribute their music worldwide. This changing landscape ⸺ including the proliferation of music streaming and new licensing schemes ⸺ has underscored the need for advancements to streamline licensing processes, track, collect and pay royalties, and facilitate more efficient contractual processes. 
Continue Reading Blockchain Technology Continues to Support a Flourishing Music Industry

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