In some of her first remarks on the subject of digital assets since Senate confirmation, Treasury Secretary Janet Yellen sounded an alarm on Bitcoin. Her views on the regulation of digital assets more broadly are sure to influence policy in the coming years at the various offices and bureaus within the Treasury Department that oversee the asset class, including the OCC, IRS, OFAC and FinCen. Continue Reading Treasury Secretary Skeptical of Bitcoin

The US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) settled with BitPay, Inc. for $507,375 to resolve 2,102 apparent violations of multiple US sanctions programs for allowing individuals located in sanctioned jurisdictions to use digital currency on its platform to transact with merchants in the United States and elsewhere. Continue Reading OFAC Settles with Digital Currency Services Provider for Apparent Violations of Multiple Sanctions Programs

In the past week, Canadian securities regulators approved the offering of the first two Canadian Bitcoin ETFs. By holding Bitcoin, the Canadian funds intend to provide investors with economic exposure to the US dollar and Canadian dollar price of Bitcoin through an ETF structure. For ETF investors, the structures have the potential to eliminate much of the friction associated with holding Bitcoin or investing in the asset directly. The ETF units have been conditionally approved for listing on the Toronto Stock Exchange. Additional details are available in the respective ETF prospectuses, which are publicly available here and here. Continue Reading Two Bitcoin ETFs Approved for Sale in Canada

As has been widely reported, President Biden has nominated Gary Gensler to be the next chairman of the Securities and Exchange Commission.  After becoming one of the youngest partners at a leading Wall Street investment bank, Gensler transitioned into government service as a senior official in President Clinton’s Treasury Department and as the chairman of the Commodity Futures Trading Commission under President Obama.  While at the CFTC, Gensler was the principal architect of the sprawling Dodd-Frank Act’s provisions regulating the swaps markets, and he worked tirelessly to implement new CFTC rules regulating the space.  He has deep experience both in the financial markets and as a regulator.

Continue Reading President Biden’s Nominee for SEC Chairman: What Does It Mean for Crypto?

Amid the rise of digital currency services, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a cautionary tale on December 30, 2020, discussing a recent settlement with BitGo, Inc. (BitGo), a California-based technology company that facilitates digital currency transactions and provides non-custodial digital wallet management services. BitGo settled for $98,830 after the company faced, at a maximum, a $53 million civil penalty for 183 apparent violations of multiple US sanctions programs.

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The Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1174 on January 4, 2021, clarifying the authority of national banks and federal savings associations to buy, sell, and issue stablecoins and participate in independent node verification networks (INVNs) in order to conduct payment activities and other bank-permissible functions.

Continue Reading OCC Authorizes Banks to Leverage Cryptocurrency Payment Networks

The President’s Working Group (PWG), a federal interagency working group of financial regulators established by Executive Order in 1988, has issued a statement outlining key regulatory and supervisory considerations related to stablecoins and digital payment systems. Beginning with a declaration that the United States encourages responsible payments innovation, the statement outlines various high-level regulatory principles that participants in stablecoin arrangements need to account for. The statement may be interpreted as a sign of what is to come in terms of federal regulation and supervision of stablecoins and other digital assets in the new year.

Continue Reading Designing Stablecoins: Federal Regulators Issue Statement Highlighting Key Regulatory and Supervisory Considerations

Newly-proposed federal legislation would require all issuers of stablecoins and certain other digital asset companies to obtain a bank charter as a condition to operation. Referred to as the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, the draft legislation is intended to shift certain digital currency activities into the regulated banking framework.

Continue Reading New Legislation Proposes to Merge Crypto and Banking