FinTech Industry & Regulation – Page 12 – FinTech and Blockchain Law Watch

New FATF Guidance Will Significantly Impact the Crypto Industry

Jun 27 2019

By Jeremy McLaughlin and Judie Rinearson

The Financial Action Task Force (“FATF”), an intergovernmental organization aimed at combatting money laundering and thwarting terrorist financing, recently issued final recommendations for the regulation of cryptocurrencies. Although the recommendations are not binding on members–it will be up to each of FATF’s 37 member countries to determine whether to enact the recommendations through legislation or regulation–it is expected that they will have widespread adoption and significant implications for the cryptocurrency industry.

Crypto-asset Regulation Attracts the Attention of Global Securities Regulators

Jun 20 2019

By Jim Bulling, Edwin Tan and Andrew Fay

On 28 May 2019, the International Organization of Securities Commissions (IOSCO) published Consultation Paper CR02/2019 (Paper), which identifies the risks and regulatory considerations associated with the trading of crypto-assets on crypto-asset trading platforms (CTPs). The Paper seeks input from industry participants amid a growing demand for an international approach to the regulation of crypto-assets, recently illustrated by the G20’s joint request for global regulators to monitor risks and consider multilateral responses in relation to crypt-assets as needed.

Banks Invest in Developing a Digital Blockchain Settlement System

Jun 17 2019

By Jim Bulling, Felix Charlesworth and Andrew Fay

Late last month, several of the world’s largest banks invested $50 million in a digital cash settlement project with the aim of developing a more efficient clearing and settlement system. The new technology, referred to as the ‘utility settlement coin’ (USC), has been a work in progress since 2015, after Swiss bank UBS Group and London-based technology startup Clearmatics announced to the market that they had commenced working on the project.

Are You in Control (of a Bank)? The Fed’s Proposed Framework for Presuming Control under the Bank and Savings and Loan Holding Company Acts

May 15 2019

By Rebecca H. Laird, Dean A. Brazier and Daniel S. Cohen

On April 23, the Federal Reserve Board (the “FRB”) published a Notice of Proposed Rulemaking (“NPR”) to “simplify and increase the transparency,” while maintaining “consistency” to its determination of whether an entity “controls” a bank or a savings association (collectively, “depository institution”). According to the FRB’s announcement, the NPR is a first draft of a “comprehensive regulatory framework for control determinations.” FinTech companies seeking to become depository institutions should pay close attention to the NPR as it provides clear guidelines for when its investors would become subject to the Bank Holding Company Act (“BHCA”).

ASX Takes First Steps in introducing its Blockchain-Based Replacement to CHESS

May 09 2019

By Jim Bulling, Felix Charlesworth and Andrew Fay

On 30 April 2019, Australian Securities Exchange (ASX) released the first of seven “drops” of software code into the “Customer Development Environment”. This marks the beginning of the introduction of the new equities clearing and settlement system, which ASX is developing to replace the existing CHESS system. The new system is based on distributed ledger technology (DLT) and promises to provide customers with access to real-time, synchronised, source-of-truth data.

CFPB Seeking Comments On Possible Remittance Rule Revisions

May 01 2019

By Daniel S. Cohen and Jeremy M. McLaughlin

On April 25^th, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) issued a request for information (“RFI”) asking for input about the scope of its Remittance Rule (the “Rule”), whether the Bureau should exempt certain small financial institutions from the Rule, and how the expiration of the Rule’s “temporary exemption” for insured depository institutions and credit unions would adversely affect consumers. Comments are due 60 days after publication in the Federal Register.

International Cryptocurrency Regulation Top of the Agenda for the Japan G20 Summit

Apr 26 2019

By Jim Bulling, Felix Charlesworth and Andrew Fay

In the lead up to the annual G20 Summit, to be hosted by Japan, Prime Minister Shinzō Abe has commissioned the creation of a cryptocurrency governance manual. The manual, which will be distributed at the G20 Summit, supports a uniform approach to regulating cryptocurrencies and contains regulatory proposals and justifications relating to the following issues:

protecting customer assets;
international security protocols; and
providing customers with information (particularly in the event of a hack).

Launch of European joint platform for EU sandboxes and innovation hubs

Apr 07 2019

By Giovanni Campi, Martina Topercerova and Jonathan Lawrence

On 2 April 2019, the European Commission announced the launch of the European Forum for Innovation Facilitators (“EFIF”). The EFIF will serve as a joint platform designed to foster collaboration and experience sharing among European financial supervisors on their engagement with FinTech firms through sandboxes and innovation hubs. On an ad-hoc basis, the European Supervisory Authorities (“ESAs”) and EU Member States’ National Competent Authorities (“NCAs”) will also be joined by third-countries’ authorities to exchange best practices, identify regulatory obstacles and share knowledge.

Cryptocurrency firms struggle to engage auditors

Apr 04 2019

By Jim Bulling and Andrew Fay

In January 2019, Canada’s largest cryptocurrency exchange, QuadrigaCX, announced that it had lost $180 million of virtual currency, prompting calls for tighter regulatory oversight of the industry.

Canada is home to 18 publicly listed cryptocurrency companies, more than any other jurisdiction in the world. This puts Canada at the heart of the issue, and has also put the Canadian Public Accountability Board (CPAB) on notice. The CPAB, which regulates auditors, has confirmed that it has been reviewing how existing Canadian audit standards apply to the cryptocurrency industry. Canada, like Australia, subscribes to the International Financial Reporting Standards.

Regulators tighten the reigns on robo advisory firms

Apr 04 2019

By Jim Bulling, Felix Charlesworth and Andrew Fay

In December 2018, the US Securities and Exchange Commission (SEC) settled an enforcement action with Wealthfront, one of the industry’s leading robo advisors. This came after Wealthfront made false statements about its software’s ability to implement a ‘tax-loss harvesting’ strategy. Wealthfront failed to properly execute the strategy, resulting in losses to a significant number of clients. Wealthfront ultimately agreed to pay a $US 250,000 penalty.

Category:FinTech Industry & Regulation