Blockchain Legal Resource

On September 10, 2018, the New York Department of Financial Services (“DFS”) authorized Gemini Trust Company and Paxos Trust Company to each offer a price-stable cryptocurrency, also known as a stablecoin, pegged to the U.S. dollar. Both Gemini and Paxos hold limited purpose trust company charters under the New York Banking Law and are authorized to offer services for buying, selling, sending, receiving and storing virtual currency. Gemini is controlled by the Winklevoss brothers, whose application for a Bitcoin ETF was recently denied by the SEC.

Recently, the federal Office of the Comptroller of the Currency (“OCC”) announced that it is now accepting applications for national bank charters from nondepository banking institutions. Numerous consumer groups and state banking agencies have publicly expressed their dissatisfaction with the concept of a national “FinTech charter,” and it is likely one or more of these groups will sue the OCC over the legality of the new form of charter. However, assuming that the OCC prevails in the oncoming litigation, the FinTech charter may present an attractive alternative to ...

On July 27, 2018, the Justice BN Srikrishna committee, formed by the Indian government in August 2017 with the goal of introducing a comprehensive data protection law in India, issued a report, A Free and Fair Digital Economy: Protecting Privacy, Empowering Indians (the “Committee Report”), and draft data protection bill called the Personal Data Protection Bill, 2018 (the “Bill”). Noting that the Indian Supreme Court has recognized the right to privacy as a fundamental right, the Committee Report summarizes the existing data protection framework in India, and recommends that the government of India adopt a comprehensive data protection law such as that proposed in the Bill.

The Securities Exchange Commission (“SEC”) and Commodities Futures Trading Commission (“CFTC”) are not the only U.S. government agencies exerting regulatory jurisdiction over initial coin offerings (“ICOs”) and cryptocurrencies. In an article written by Hunton Andrews Kurth lawyers in Crowdfund Insider, Richard Garabedian and Shaswat Das discuss the Financial Crimes Enforcement Network's (“FinCEN's”) guidance, enforcement actions and related compliance issues. In 2013, FinCEN, a bureau of the U.S. Department of Treasury, began issuing guidance on virtual currency, explicitly stating that virtual currency exchangers and administrators are money transmitters and must comply with the Bank Secrecy Act (“BSA”) and related regulations. Most recently, on February 13, 2018, FinCEN sent a letter to U.S. Senator Ron Wyden that sought to clarify its role as a regulator of virtual currencies and ICOs. In the letter, FinCEN asserted that individuals involved in certain ICOs must register as money services businesses (“MSBs”) and consequently comply with the corresponding BSA and anti-money laundering (“AML”) compliance requirements. The FinCEN letter notes that ICOs that are otherwise regulated by the SEC or CFTC should comply with the AML and related requirements imposed by those agencies. Despite this attempt at clarifying the state of regulatory play for ICOs and virtual currencies, federal and state MSB registration requirements remain fluid and should be evaluated on a case-by-case basis for ICOs and those issuing cryptocurrencies.