Archive: December 2019

1
The FDIC’s Recent Brokered Deposit Rulemaking Might Provide Relief to the Prepaid Industry
2
UK JURISDICTION TASKFORCE STATEMENT ON CRYPTO ASSETS AND SMART CONTRACTS – A “WATERSHED MOMENT”
3
To List or Not to List? NYDFS Seeks Comment on Proposed Rules Authorizing Bitlicensees to Self-Certify Cryptocurrency Listings
4
US Consumer Financial Protection Bureau Seeking Comments on Proposed Remittance Rule Revisions
5
Japan’s New Crypto Regulation – 2019 Amendments to Payment Services Act and Financial Instruments and Exchange Act of Japan

The FDIC’s Recent Brokered Deposit Rulemaking Might Provide Relief to the Prepaid Industry

By Judie Rinearson and John ReVeal

On December 12, 2019, the Federal Deposit Insurance Corporation (“FDIC”) released a Notice of Proposed Rulemaking (“NPR”) to amend the brokered deposit regulation.  While the proposed regulation will not eliminate the restrictions or remove all burdens from those institutions that accept brokered deposits, the NPR indicates that the FDIC has recognized that changes in technology call for changes in regulation.  As a result, banks working with innovative prepaid payments companies to provide financial services might get some brokered deposit relief.

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UK JURISDICTION TASKFORCE STATEMENT ON CRYPTO ASSETS AND SMART CONTRACTS – A “WATERSHED MOMENT”

By Judith Rinearson and Philip Morgan

On November 18, 2019, Geoffrey Vos, Chancellor of the UK High Court, announced the launch of a “Legal Statement on Crypto Assets and Smart Contracts,” which he described as a “watershed moment” for English Law.  The statement, which can be found here, brings new clarity to the likely status of both smart contracts and cryptocurrencies under English law. 

A committee of experts has prepared the statement and, although technically it carries no binding legal authority, it is likely to be regarded as the most authoritative position available until the matters it covers are dealt with specifically by the English courts or by revised legislation.

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To List or Not to List? NYDFS Seeks Comment on Proposed Rules Authorizing Bitlicensees to Self-Certify Cryptocurrency Listings

Daniel S. Cohen and Jeremy M. McLaughlin

On December 11, 2019, the New York Department of Financial Services (“NYDFS”) published “Proposed Guidance Regarding Adoption or Listing of Virtual Currencies” (“Proposal”). The Proposal would establish a framework to allow “regulated virtual currency licensees” and entities exempt from licensure, such as trust companies, to offer or incorporate into their services cryptocurrencies that are:

  1. pre-approved by NYDFS; or
  2. certified by the licensee as being compliant with the licensee’s NYDFS-approved listing criteria.

The Proposal is intended to “enhance efficiency” and enable licensees to “offer and use new coins in a timely fashion”.

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US Consumer Financial Protection Bureau Seeking Comments on Proposed Remittance Rule Revisions

Jeremy M. McLaughlin and Daniel S. Cohen

On December 3, the United States Consumer Financial Protection Bureau (“CFPB”) published a notice of proposed rulemaking to revise the Remittance Rule (“Proposed Rule”) and is accepting comments until January 21, 2020.  The proposal follows the CFPB’s April 2019 request for information on the Remittance Rule (see here for our previous discussion).  The key provisions of the Proposed Rule address two aspects of the Remittance Rule: (1) the Rule’s applicability to a company that executes 100 or more remittances per year in the normal course of business, and (2) the Rule’s allowance for insured banks and credit unions to disclose estimates, rather than exact figures, under certain circumstances. This latter allowance is set to expire on July 21, 2020.

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Japan’s New Crypto Regulation – 2019 Amendments to Payment Services Act and Financial Instruments and Exchange Act of Japan

By Tsuguhito Omagari and Yuki Sako

Japan will fundamentally change its crypto asset regulations effective in spring of 2020.

In May, 2019, the National Diet, the Japanese national legislature, passed an amendment bill to the Payment Services Act (the “PSA”) and the Financial Instruments and Exchange Act (the “FIEA”), which was promulgated on June 7, 2019 (the “2019 Amendment”).  The 2019 Amendment will become effective within one year from promulgation, following further rulemaking by the Japan Financial Services Agency (the “JFSA”) to implement the 2019 Amendment, which is anticipated sometime soon and includes public comment process.

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