Following up on President Biden’s recent executive order on digital assets, the US Treasury Department recently announced the publication of three reports on digital assets. The reports address issues relating to The Future of Money and Payments; Implications for Consumers, Investors, and Businesses; and an Action Plan to Address Illicit Financing Risks of Digital Assets.
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In recent months, members of Congress have introduced a wide variety of bills seeking to create a new federal regulatory regime for digital assets. NASAA, which is an umbrella organization for state and provincial securities regulators in the US, Canada and Mexico, recently submitted a letter to Congress critical of one such bill that lays out a series of arguments more broadly against federal action.
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On August 10, 2022, 3-2 majorities of the SEC and CFTC voted to propose amendments to Form PF reporting for certain investment advisers to private investment funds. Among the many proposed amendments to the form, the proposed rules would for the first time require covered investment advisers to report on certain digital asset investments.
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In a series of parallel actions announced on July 21, 2022, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) initiated criminal and civil charges against three defendants in the first cryptocurrency insider trading case.
Continue Reading Government Brings First Cryptocurrency Insider Trading Charges
June 9, 2022 letter to the Directors of the US Patent and Trademark Office (USPTO) and US Copyright Office, Senators Thom Tillis (R-NC) and Patrick Leahy (D-VT) requested that the agencies jointly undertake a study of intellectual property (IP) rights considerations with respect to non-fungible tokens (NFT or NFTs).
Continue Reading Senators Dive Into the World of NFTs, Asking US Patent and Copyright Offices to Consider Questions Regarding Related IP Rights
On June 3, 2022, House Energy and Commerce Chair Rep. Frank Pallone (D-NJ), Ranking Member Rep. Cathy McMorris Rodgers (R-WA) and Senate Commerce, Science and Transportation Committee Ranking Member Sen. Roger Wicker (R-MS) released a new comprehensive federal privacy bill, the American Data Privacy and Protection Act.
Continue Reading House and Senate Release a Bipartisan U.S. Federal Privacy Bill
On June 8, 2022, New York’s Department of Financial Services released interpretive guidance on the “Issuance of U.S. Dollar-Backed Stablecoins.” The guidance applies to entities that issue stablecoins under DFS supervision, and addresses three broad topics—redeemability, reserve requirements, and monthly attestation by an independent CPA firm.
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On June 1, 2022, the Department of Justice announced its first criminal indictment for insider trading of nonfungible tokens, or NFTs. The case opens yet another front in the Government’s efforts to police the burgeoning marketplace for digital assets and NFTs.
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What Happened:
On May 16, 2022, the US Department of State, US Department of Treasury, and the Federal Bureau of Investigation issued combined guidance (“IT Workers Advisory”) on efforts by North Korean nationals to secure freelance engagements as remote information technology (“IT”) workers by posing as non-North Korea nationals. The IT Workers Advisory provides employers with detailed information on how North Korean IT workers operate, highlights red flag indicators for companies hiring freelance developers and for freelance and payment platforms to identify these workers, and provides general mitigation measures for companies to better protect against inadvertently engaging these workers or facilitating the operations of the North Korean government in violation of US sanctions.
In one of the first criminal cases brought under US sanctions laws involving cryptocurrency transactions, a federal magistrate judge approved the Department of Justice’s criminal complaint. In the opinion unsealed on May 13, 2022, US Magistrate Judge Zia M. Faruqi ruled that the Department of Justice demonstrated probable cause in accusing an unnamed defendant of transmitting more than $10 million in bitcoin to a “comprehensively sanctioned” country.
Continue Reading Judge Rules in Criminal Sanctions Case Involving Cryptocurrency