Tag:US

1
California is Seeking Industry Input on New Crypto Rules
2
CFTC Files Complaint Against Voyager’s Former CEO Stephen Ehrlich Alleging Fraud and Registration Failures
3
Connecticut Stifles Employees’ Access to their Earned Wages
4
New FTC Guidance: The INFORM Consumers Act’s Impact on Online Marketplaces’ Third-Party Sellers
5
An SEC First: NFTs are Sold as Securities
6
First SEC Enforcement Action Arising Out of the New Marketing Rule Targets FinTech Investment Advisor Titan Global Management
7
SDNY Rules Ripple’s XRP token is NOT a Security
8
SEC’s Stunning Enforcement Actions against Binance and Coinbase
9
CFPB Raises Alarms Without Providing All the Facts
10
Does your Marketplace need to be “INFORM-ed” by June 27th? The New INFORM Consumers Act Could Significantly Impact Online Marketplace Operations

California is Seeking Industry Input on New Crypto Rules

By: Jeremy McLaughlin and Josh Durham

The California Department of Financial Protection and Innovation (DFPI) is requesting comments on potential rules it will promulgate to implement the state’s recently-enacted Digital Financial Assets Law (DFAL), which establishes a formal licensing regime for digital asset service providers. Please review our client alert for a detailed analysis of the new law, which takes effect 1 July 2025.

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CFTC Files Complaint Against Voyager’s Former CEO Stephen Ehrlich Alleging Fraud and Registration Failures

By Cliff Histed, Cheryl Isaac, Eden Rohrer, and Josh Durham

On 12 October, the Commodity Futures Trading Commission (CFTC) filed a complaint against Stephen Ehrlich, the former CEO of the now-defunct cryptocurrency platform, Voyager Digital (Voyager), in the US District Court for the Southern District of New York. In its 55-page complaint, the CFTC asserts both fraud and registration failures by Ehrlich in connection with the Voyager platform and Voyager’s operation of an unregistered commodity pool.

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Connecticut Stifles Employees’ Access to their Earned Wages

By John ReVeal and Jeremy McLaughlin

Earned Wage Access (or EWA) programs are popular programs that allow employees to access their salary or wages that have already been earned, prior to the scheduled payroll date. Many argue that these beneficial programs are not truly “loans” because employees are accessing their own money without paying the high fees charged by payday lenders. However, some state regulators disagree, making EWA programs more difficult to access, depending on what state in which the employee lives.

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New FTC Guidance: The INFORM Consumers Act’s Impact on Online Marketplaces’ Third-Party Sellers

By Adam Husik and John ReVeal

The Federal Trade Commission (FTC) has issued guidance on how the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (the “INFORM Consumers Act” or “Act”) may impact online sellers who offer consumer products through online marketplaces.

The Act, as described in our prior blog post, is aimed at addressing consumer complaints about online purchases of stolen, counterfeit, or defective products. As of the Act’s 27 June 2023 effective date, online marketplaces are now generally required to obtain, verify, and disclose certain financial and business information about high-volume sellers on their platforms.

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An SEC First: NFTs are Sold as Securities

By Drew Hinkes, Eden Rohrer, and Josh Durham

On 28 August 2023, in its first enforcement action for securities registration violations brought against an issuer of NFTs, the SEC settled with media and entertainment company, Impact Theory, LLC (Impact).  

The settlement order included findings that from 13 October 2021 to 6 December 2021, Impact sold non-fungible tokens called Founder’s Keys (KeyNFTs) raising approximately US$30 million. Broadly interpreting Howey, the SEC found that the NFTs were sold in investment contracts, based on the company’s public statements about the expected rise in value of the NFTs and its use of profits from sales to develop the company. 

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First SEC Enforcement Action Arising Out of the New Marketing Rule Targets FinTech Investment Advisor Titan Global Management

By Judie Rinearson, Richard Kerr, and Josh Durham

Effective in 2022, the SEC adopted a new Marketing Rule for investment advisers to modernize the regulation of investment adviser advertising and solicitation practices. The adoption of the new Marketing Rule was the first substantive amendment to Rule 206(4)-1 under the Investment Advisers Act of 1940 since its adoption in 1961. A discussion of the impact of the new Marketing Rule can be found here.

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SDNY Rules Ripple’s XRP token is NOT a Security

By Andrew Hinkes and Eden Rohrer

On July 13, 2023, in a long awaited decision in Securities and Exchange Commission v. Ripple Labs, Inc., Bradley Garlinghouse and Christian A. Larsen, Judge Analisa Torres of the United States District Court for the Southern District of New York ruled on the cross-summary judgement motions finding that Defendant Ripple Labs’  XRP Token is not a security, handing the SEC a stunning defeat on many arguments that have been advanced by the SEC in multiple enforcement actions affecting issuers and exchanges of digital assets.

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SEC’s Stunning Enforcement Actions against Binance and Coinbase

By Drew Hinkes, Cliff Histed, Judie Rinearson, Eden Rohrer, Max Black

In a stunning move, over the last two days, the Securities and Exchange Commission (“SEC”) has filed back-to-back enforcement actions against major crypto exchanges Binance (See https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-101.pdf) and Coinbase (See https://www.sec.gov/litigation/complaints/2023/comp-pr2023-102.pdf . This clearly indicates that the SEC is flexing its enforcement power over both international exchanges as well as those exchanges with a focus on the United States.

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CFPB Raises Alarms Without Providing All the Facts

By Judie Rinearson and Jeremy McLaughlin

The Consumer Financial Protection Bureau’s (CFPB) recent Consumer Alert was certainly well intentioned. Many consumers (including the authors) who hold funds in payment apps (such as Venmo and Paypal) should be made aware that the funds are usually NOT held in an FDIC-insured bank.  But that doesn’t mean the funds are necessarily unprotected.

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Does your Marketplace need to be “INFORM-ed” by June 27th? The New INFORM Consumers Act Could Significantly Impact Online Marketplace Operations

By John ReVeal, Judie Rinearson, and Katie Staba

The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (the “INFORM Consumers Act” or “Act”) (https://www.congress.gov/117/bills/s936/BILLS-117s936is.pdf ) which passed on December 29, 2022 will come into effect on June 27, 2023.  Originally intended to address increasing consumer complaints about online marketplace purchases of counterfeit or defective products from third party sellers, the Act requires both collection, verification and, in certain cases, disclosure of third party seller information to combat this perceived marketplace unaccountability. 

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