Davis Polk Discusses FinCEN, CFTC Penalties on Cryptocurrency Derivatives Exchange

By Robert Cohen, Jai Massari, Daniel Stipano, Zachary Zweihorn and Kendall Howell August 19, 2021 by renholding

The CFTC and FinCEN recently announced a settlement with BitMEX for $100 million to resolve an enforcement action related to the exchange’s failure to register as a futures commission merchant and failure to establish a BSA/AML compliance program.

The Order

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Why We Need to Verify and Unmask the Identity of Cryptocurrency Users

By Hadar Y. Jabotinsky and Michal Lavi July 23, 2021 by renholding

Cryptocurrencies are by now widely known as electronically generated and stored currencies that enable users to trade tokens. The tokens are exchanged anonymously through a decentralized payment system: the blockchain. To further anonymity, the parties to cryptocurrency transactions are identified …

Skadden Discusses Closer Scrutiny of Corporate Conduct Under Biden

By Gary DiBianco, Andrew M. Lawrence, Jessie K. Liu, Colleen P. Mahoney and Jocelyn E. Strauber May 6, 2021 by renholding

The Biden administration is widely expected to be tougher on corporate wrongdoing than its predecessor. Although there have not yet been significant changes to existing policies, key nominations to date and early enforcement initiatives signal close scrutiny of corporate conduct …

O’Melveny & Myers Discusses the Legal Challenges of NFTs

By Heather J. Meeker, Laurel Loomis Rimon, Eric Sibbitt and Braddock Stevenson April 14, 2021 by Nisha Chandra

Non-Fungible Tokens, or NFTs, are big news these days. After an NFT for a piece of digital art by the artist Beeple (Mike Winkelmann) sold for $69 million in March 2021―making it the third-most expensive artwork by a living …

Regulating Digital Currencies: Towards an Analytical Framework

By Steven L. Schwarcz March 23, 2021 by renholding

In a new article, I examine the development and regulation of digital currencies, which are monetary currencies that are evidenced electronically. Large “wholesale” payments among businesses and financial institutions already occur electronically, and bitcoin has been with us for …

Davis Polk Discusses OCC Letter Confirming that National Banks May Provide Cryptocurrency Custody

By Randall Guynn, Jai Massari, Daniel Newman and Jeremy Sklaroff July 29, 2020 by renholding

The Office of the Comptroller of the Currency (the OCC) issued an interpretive letter (the Letter) confirming that national banks and federal savings associations (together, banks) may provide cryptocurrency custody services.[1] This Letter is the latest …

What Law and Economics Has to Say About Property Rights in Cryptocurrencies

By Roee Sarel April 2, 2020 by renholding

Technological advancements of recent years have given birth to a strange and interesting creature: cryptocurrencies like Bitcoin, Ether, and Facebook’s upcoming Libra. Many of the advantages offered by these tokens stem from their underlying technology – a decentralized ledger, which …

Stablecoins in Cryptoeconomics: From Initial Coin Offerings to Central Bank Digital Currencies

By Marco Dell’Erba November 15, 2019 by renholding

In a recent article, I highlight the links among initial coin offerings (ICOs), cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). Although these entities exist in different contexts (securities law and capital formation, payment systems, monetary policy), they are intertwined …

Facebook’s Libra Heightens Debate Over the Regulation of Cryptocurrencies

By Hadar Y. Jabotinsky August 16, 2019 by renholding

Cryptocurrencies like Ether, DAO, Bitcoin and Facebook’s Libra are electronically generated and stored currencies by which users can trade real or virtual objects with one another, bypassing traditional central clearinghouses. Given that these cryptocurrencies are starting to replace some national …

Fintech and Banking

By Anjan V. Thakor August 14, 2019 by renholding

In a recent paper, I review the literature on fintech and its interaction with banking. Included in fintech are innovations in payment systems (including cryptocurrencies), credit markets (including peer-to-peer or “P2P” lending), and insurance, with blockchain-assisted smart contracts playing a …

Riding the Mania of Blockchain: Public Firms’ Speculative 8-K Disclosures

By Stephanie F. Cheng, Gus De Franco, Haibo Jiang and Pengkai Lin August 7, 2019 by renholding

The price of Bitcoin, a cryptocurrency based on blockchain technology, increased dramatically from less than a penny when it was launched in 2009 to $900 in January 2017 and peaked at over $19,500 in December 2017. This rise coincided with …

ICO vs. IPO: Empirical Findings, Information Asymmetry, and the Appropriate Regulatory Framework

By Moran Ofir and Ido Sadeh August 5, 2019 by renholding

Initial coin offerings (ICOs) are a new form of fundraising whereby blockchain-related ventures raise public capital in exchange for newly issued digital tokens. The issued tokens may represent a variety of rights, ranging from financial rights – such as dividend …

Gibson Dunn Offers 2019 Mid-Year Securities Enforcement Update

By Mark K. Schonfeld and Amy Mayer July 24, 2019 by renholding

The first half of 2019 has seen a continuation of the Securities and Exchange Commission’s emphasis on protecting the interests of Main Street investors. Chairman Clayton reiterated these themes in his testimony in May before the Financial Services and General …

SEC Commissioner Peirce Talks Digital Assets: How We “Howey”

By Hester M. Peirce May 17, 2019 by renholding

One year ago, I gave a speech—appropriately in Southern California—called “Beaches and Bitcoin.”[1] At that time—not so long ago in analog time but eons ago in digital time—the burning question was how to decide when issuing tokens constituted an

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SEC Commissioner Offers Inside View of the Regulation Machine

By Hester M. Peirce February 13, 2019 by renholding

I had high expectations when I picked up Thom [Lambert’s] book on regulation shortly after it first came out several years ago.[1] Those expectations were exceeded by the clear and compelling way in which the book wrestles with the

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SEC’s Co-Director of Enforcement Talks About Her Division’s Impact

By Stephanie Avakian September 21, 2018 by renholding

My speech today [1] happens to fall a little less than two weeks before the close of Steve Peikin’s and my first full fiscal year as Co-Directors of the SEC’s Division of Enforcement. In many respects, a year is an

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Revisiting the SEC Ruling on Whether Cryptocurrencies are Securities

By Usman W. Chohan August 17, 2018 by renholding

In June 2018, the cryptocurrency community waited with baited breath for the Securities and Exchange Commission (SEC) decision on whether cryptocurrencies were securities, commodities, or something else.

If the commission treated them as securities, they would be subject to …

Cleary Gottlieb Discusses the SEC’s New Cyber Unit, Six Months On

By Jonathan S. Kolodner, Rahul Mukhi, Matthew C. Solomon and Anne Titus Hilby April 3, 2018 by renholding

On September 25, 2017, the U.S. Securities and Exchange Commission (“SEC” or the “Commission”) announced the creation of a Cyber Unit within the Enforcement Division in order to further the Division’s “substantial expertise in the detection and pursuit of fraudulent …

Kirkland & Ellis Discusses Trump Administration’s Ban on Dealings in Venezuelan Cryptocurrency

By Mario Mancuso, Erica Williams, Michael Casey, Sanjay Mullick and Joanna Ritcey-Donohue April 2, 2018 by Carly Goeman

On March 19, 2018, President Trump issued an Executive Order “Taking Additional Steps to Address the Situation in Venezuela” (“Executive Order”) that prohibits U.S. persons from engaging in dealings in any digital currency, digital coin, or digital token issued by, …

Ropes & Gray Discusses the Regulatory Push to Rein in ICO Market

By Christopher Conniff, Michael McGovern, Helen Gugel and Jessica Soricelli March 21, 2018 by renholding

On March 1, 2018, Overstock.com disclosed that its ongoing $250 million initial coin offering has been under investigation by the U.S. Securities and Exchange Commission since February.¹ The investigation appears to be part of a widespread probe pursuant to …

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