Archive: March 2018

1
Hope for Regulatory Relief on the Horizon? State Regulators to Standardize Licensing Process for Money Transmitters
2
Increasing FinTech regulatory ties between Australia and the UK
3
UK FCA Lead on Global Sandbox
4
Weather Bureau IT mining cryptocurrencies?
5
SEC on Unlawful Online Platforms Trading in Digital Assets
6
U.S. Treasury Official Previews Report on FinTech Regulation
7
Federal Court to decide whether tokens issued through an ICO are securities
8
SEC Sends Wave of ICO Subpoenas
9
ASX Listings and Cryptocurrencies

Hope for Regulatory Relief on the Horizon? State Regulators to Standardize Licensing Process for Money Transmitters

By Eric A. Love and Judith Rinearson

The Conference of State Bank Supervisors (CSBS) recently announced that seven states, Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington, have agreed to a multi-state compact (the Compact) that will standardize certain aspects of the licensing process for money services businesses (MSBs).

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Increasing FinTech regulatory ties between Australia and the UK

By Jim Bulling and Michelle Chasser

Australia and the UK have strengthened their joint support of the FinTech industry by entering into two new arrangements which build on the original FinTech cooperation agreement entered into by the Australian Securities and Investments Commission (ASIC) and the UK Financial Conduct Authority (FCA) in March 2016.

The Australian and UK Governments have entered into the UK-Australia FinTech Bridge which establishes a framework for individual arrangements involving governments, regulators, trade and investment, and business. A number of understandings were agreed to including:

  • investigating options for developing complementarity between the UK and Australian open banking regimes;
  • continuing to develop a set of international standards for blockchain applications; and
  • exploring opportunities to enable quicker processing of licences for firms already licensed in the other jurisdiction.

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UK FCA Lead on Global Sandbox

By Jonathan Lawrence

In a speech to Innovate Finance 2018 on 19 March, Christopher Woolard, Executive Director of Strategy and Competition at the UK Financial Conduct Authority (FCA) talked about the demand from FinTech firms to operate internationally and the FCA working with partners from around the world to consider options for a global sandbox. He said that the potential of such a project is huge – from solving global problems like money laundering to reducing the regulatory burden of compliance. Currently there is no joint sandbox programme with other regulators for firms to participate in. Such a project represents new territory.

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Weather Bureau IT mining cryptocurrencies?

By Cameron Abbott and Allison Wallace

The Australian Federal Police are investigating two members of the Bureau of Meteorology’s IT team for allegedly running an operation in which they made use of the Bureau’s powerful computers to “mine” cryptocurrencies.

It was revealed late last week that the AFP raided the Bureau’s Melbourne CBD offices on February 28, and questioned the two employees. No charges have been laid, or arrests made. Read More

SEC on Unlawful Online Platforms Trading in Digital Assets

By Rizwan Qayyum

The Securities and Exchange Commission (SEC) released a statement today which advises of the dangers of cryptocurrencies and other digital assets, which may be offered or sold in an ICO, being traded using online exchanges. The statement states that a number of “potentially unlawful” platforms are appearing to provide investors with unearned safety and that “the SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not,” the agency said.

The statement is targeting exchanges, and also noted that online wallets may also qualify under existing regulations if they are in a position to facilitate trading. No cryptocurrency exchange is currently registered as an approved exchange by the SEC.

You can read the SEC statement here.

U.S. Treasury Official Previews Report on FinTech Regulation

By Eric A. Love

According to press reports, Craig Phillips, Counselor to the Secretary of the U.S. Department of the Treasury (Treasury), recently delivered remarks at a conference held by the Institute of International Bankers in which he previewed the upcoming Treasury report about possible reforms to the laws and regulations that apply to non-bank financial institutions and FinTech companies.  It will be the fourth and final report that Treasury is required by Executive Order 13772 to release about ways to reform the U.S. financial system, consistent with the Trump Administration’s principles of regulation.

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Federal Court to decide whether tokens issued through an ICO are securities

By Clifford Histed

In a criminal case in Brooklyn, New York, a federal court has been asked to decide for the first time whether tokens or coins issued through an initial coin offering constitute “securities” under U.S. securities laws.

On September 29, 2017 the SEC filed a civil complaint against Maksim Zaslavskiy, alleging that he had committed securities fraud and sold “illegal unregistered securities.”  The instruments at issue were tokens that Zaslavskiy allegedly sold to the public through initial coin offerings of his companies RECoin Group Foundation LLC and DRC World, Inc.  The lawsuit followed an investigation that apparently took less than 90 days to conduct, and that involved reviewing social media and online postings.  The investigation appears to have been conducted parallel with a criminal investigation by the FBI, and a criminal complaint was filed 28 days after the SEC complaint.  The SEC case was stayed pending resolution of the criminal case.

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SEC Sends Wave of ICO Subpoenas

By Clifford Histed

According to press accounts, the SEC recently issued dozens of subpoenas and Requests For Information seeking details about the targeted initial coin offerings.  The correspondence accompanying the subpoenas and RFIs also reportedly make an unusual offer – in lieu of producing voluminous documents the subpoena recipients may voluntarily appear at the SEC’s office to answer questions.

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ASX Listings and Cryptocurrencies

By Jim Bulling and Edwin Tan

The Australian Securities Exchange (ASX) has recently provided several comments in relation to entities that are listed or looking to list on the ASX that are involved in cryptocurrency-related businesses, such as developing cryptocurrency tokens, conducting Initial Coin Offerings and operating cryptocurrency exchanges.

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