Blockchain technology has the potential to revolutionise many industries; it has been said that “blockchain will do to the financial system what the internet did to media”. Its most famous use is its role as the architecture of the cryptocurrency Bitcoin, however it has many other potential uses in the financial sector, for instance in … Continue Reading
On July 16, 2018, the Financial Stability Board (“FSB”) issued a report to the G20 Ministers of Finance and Central Bank Governors summarizing the work that the FSB and other international standard-setting bodies have undertaken regarding crypto-assets. The FSB notably reported that it has developed a framework for monitoring financial stability risks related to crypto-assets, … Continue Reading
This past week has been an especially active one for the U.S. Commodity Futures Trading Commission (CFTC). On Monday, in a speech to the North American Securities Administrators Association (NASAA), CFTC Chairman Giancarlo announced a Memorandum of Understanding (MOU) to increase cooperation between state securities regulators and the CFTC — particularly with respect to prosecuting … Continue Reading
California has taken a conservative step on the path to greater regulation of blockchain technology or legal recognition of blockchain-secured data. On May 18, an amended bill was referred to the State Assembly Appropriations Committee for review that would provide for the establishment of a blockchain working group to evaluate “the potential uses, risks, and … Continue Reading
The Australian Transaction Reports and Analysis Center (“AUSTRAC”) recently implemented a new regulation for digital currency exchange providers operating in Australia called the Anti-Money Laundering and Counter-Terrorism Financing (Digital Currency Exchange Register) Policy Principles 2018. AUSTRAC is Australia’s financial intelligence agency and is responsible for the enforcement of Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act … Continue Reading
On March 22, 2018, the Government Accountability Office (“GAO”) issued a report on the regulation of financial technology (“fintech”) in response to a request from Congress for more information on “fintech activities.” The report concludes that agencies that regulate fintech firms should coordinate with each other more closely, develop offices of innovation (for agencies that … Continue Reading
When bitcoin entered the public’s eye for the first time in 2013, it was touted as one of the greatest inventions for the unbanked in Africa. The World Bank estimates that of the 2 billion people without access to the modern financial system, a third live in Sub-Saharan Africa. In recent months, bitcoin and cryptocurrency … Continue Reading
Blockchain is a powerful innovation that is poised to bring substantial positive change to the financial services industry as well as many other industries. Despite such promise, blockchain, like any emerging financial services technology, must be evaluated from the perspective of cybersecurity risk – both to an individual financial institution and to the broader and … Continue Reading
Yesterday, the Federal Communications Commission sent a letter to an individual in Brooklyn, New York, alleging that a device in the individual’s residence that is being used to mine Bitcoin is generating spurious radiofrequency emissions, causing interference to a portion of T-Mobile’s mobile telephone and broadband network. The letter states that on November 30, 2017, … Continue Reading
Data is of particular importance to businesses in the financial sector. This blog post provides a high level overview of how United States copyright law treats data. U.S. copyright protection for raw, unstructured data is generally regarded as thin or unavailable. The reason for this is that such raw data may not satisfy the creativity … Continue Reading
On August 3, 2017, the International Swaps and Derivatives Association (“ISDA”) and Linklaters LLP released a whitepaper titled “Smart Contracts and Distributed Ledger – A Legal Perspective.” The whitepaper sets out to define the terms “smart contract” and “distributed ledger,” to analyze their applications to the derivatives industry, and to highlight potential legal issues raised … Continue Reading
On July 25, 2017, the Securities and Exchange Commission (“SEC”) issued a Report of Investigation (“Report”) finding that the digital tokens offered and sold by the virtual, unincorporated organization known as “The DAO” were securities subject to the federal securities laws. The DAO sold DAO tokens in exchange for the digital currency Ether used on … Continue Reading
On July 6, 2017, the Commodity Futures Trading Commission (“CFTC”) announced that it had granted LedgerX registration as a swap execution facility (“SEF”). LedgerX is a platform that will trade and clear options on bitcoin. LedgerX has also applied to become a derivatives clearing organization. If approved, LedgerX “would be the first federally regulated bitcoin … Continue Reading
See our colleagues’ article in Corporate Counsel, Smart Insurance Policy Contracts: Policyholder Opportunities and Risks, regarding smart contract applications in the insurance industry.… Continue Reading
The Federal Reserve Board released a staff research paper on Monday, December 5, 2016, addressing the potential use of distributed ledger technology (DLT) in payments, clearing, and settlement (PCS) processes. A distributed ledger is a type of database in which identical copies of information are distributed and maintained among multiple parties or multiple nodes in … Continue Reading
At the inaugural Financial Technology Forum hosted by the Securities and Exchange Commission (the “SEC”) November 14, 2016, SEC Chairwoman Mary Jo White and Commissioner Michael Piwowar gave remarks addressing the future of fintech regulation and the role of the SEC in such regulation. Both Chairwoman White and Commissioner Piwowar emphasized the potential benefits and … Continue Reading
Financial services companies, software developers and governments alike are exploring opportunities to automate a wide range of legacy processes using smart contracts and blockchain technology. What are smart contracts? Smart contracts are “computable” legal contracts that execute automatically (without verification by a third party) when a set of pre-programmed conditions are satisfied. Unlike traditional legal … Continue Reading
