Blockchain Legal Resource

On March 9, 2022, the Biden Administration released its much-anticipated “Executive Order on Ensuring Responsible Development of Digital Assets” (Executive Order). The White House describes the Executive Order as the “first whole-of-government strategy” on digital assets and attempts to strike a balance between encouraging innovation and US leadership in the digital asset space, while signaling an appetite to protect against a variety of stated risks through additional regulation and legislation.

What Happened:

On March 8, 2022, President Biden issued an Executive Order (the “March 8 Executive Order”)¹ prohibiting the importation of Russian-origin oil, liquified natural gas (“LNG”), and coal into the United States and prohibiting US persons from making new investments in Russia’s energy sector.  The March 8 Executive Order also prohibits US persons from providing any approval, financing, facilitation, or guarantee to a foreign person seeking to import Russian-origin oil into the United States or make new investments in Russia’s energy sector.  The March 8 Executive Order follows on a series of significant US sanctions actions against Russia in recent weeks.  The US Department of Justice and Treasury Department also announced additional efforts and guidance intended to emphasize US sanctions efforts and to provide guidance on detecting and preventing efforts by blocked persons to evade sanctions, including through the use of cryptocurrency.  On March 9, 2022, President Biden issued an Executive Order (the “Executive Order on Digital Assets”) directing US government agencies to study and report on cryptocurrencies and other digital assets and consider, among other things, the use of digital assets to circumvent US sanctions.²

A series of recent statements by key financial regulators and US senators once again bring cryptocurrency regulation into the spotlight. In this post, we summarize several recent developments.

What Happened:

On February 28, 2022, the US Department of Treasury’s Office of Foreign Assets Control (“OFAC”) issued further sanctions on Russia’s Central Bank, National Wealth Fund, and Ministry of Finance, and announced regulations to implement Executive Order 14024 under the Russia Harmful Foreign Activities Sanctions Program. On February 24, 2022, the Department of Commerce’s Bureau of Industry and Security (“BIS”) issued an immediate final rule implementing sanctions under the Export Administration Regulations (“EAR”).¹

The red-hot market for nonfungible tokens, or NFTs, continues to draw regulatory scrutiny. A Department of the Treasury report issued on February 4, 2022, is the latest to focus on potential regulatory issues associated with this digital asset class.

The intersection of retail sales and blockchain technology is a current “hot” topic. But what does this actually mean for retailers? Is the time and money needed to invest in new technology worth the cost? What intellectual property (IP) protection is available?

On January 20, 2022, the Federal Reserve Board published a discussion paper on the potential for a US central bank digital currency, or CBDC.  Entitled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” the paper provides further insight into the public policy concerns guiding the Fed as it deliberates whether to adopt a US CBDC.

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In connection with a December 14, 2021, hearing of the Senate Banking Committee focused on the topic of stablecoins, Ranking Member Pat Toomey (R-PA) released a collection of principles that he hopes will influence the development of a future legislative framework for the asset class. Senator Toomey’s principles offer a more flexible approach to stablecoins in contrast to the approach embraced in a recent report on stablecoins released by the President’s Working Group, which advocated for limiting stablecoin issuances to entities that are insured depository institutions under the oversight of federal banking regulators.

On December 6, 2021, the Biden administration released a first-of-its-kind, comprehensive US Strategy on Countering Corruption.  The Strategy addresses all angles of the fight against corruption: prevention, investigation, exposure, and prosecution.  To accomplish this, it relies on a whole-of-government approach resting on five “pillars”: