Archives: Fintech

Subscribe to Fintech RSS Feed

Bureau of Consumer Financial Protection Announces Participation in the Global Financial Innovation Network

The Bureau of Consumer Financial Protection announced earlier this week that it would join ten non-US financial regulators in an alliance, called the Global Financial Innovation Network (GFIN), to encourage the growth of fintech — and, potentially, create a “global sandbox” for financial innovation. The alliance was initially proposed, in February 2018, by the UK’s … Continue Reading

Treasury Releases Report on Nonbank Institutions, Fintech, and Innovation

On July 31, 2018, the U.S. Department of the Treasury released a report identifying numerous recommendations intended to promote constructive activities by nonbank financial institutions, embrace financial technology (“fintech”), and encourage innovation. This is the fourth and final report issued by Treasury pursuant to Executive Order 13772, which established certain Core Principles designed to inform … Continue Reading

The OCC Will Move Forward to Accept Applications for Special Purpose National Bank Charters for Fintech Companies

The Office of the Comptroller of the Currency (“OCC”) announced yesterday that a nondepository financial technology (“fintech”) company that engages in a core banking activity, such as paying checks or lending money, can now apply for a special purpose national bank (“SPNB”) charter. This announcement followed shortly after the release of the Treasury Department’s report … Continue Reading

European Data Protection Board Provides Clarification On PSD2

In response to questions from a Member of the European Parliament, the European Data Protection Board (EDPB) has provided much needed clarification on the overlap between the General Data Protection Regulation (GDPR) and the EU Payment Services Directive (PSD2) in an open letter.  As we identified in a previous blog post on this topic, the … Continue Reading

The GDPR and Blockchain

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

FSB Develops Framework for Monitoring Crypto Risks

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

Square Temporarily Withdraws ILC Application

On July 5, 2018, Square, Inc. (“Square”) announced (paywall) that it had temporarily withdrawn a pending application with the FDIC to obtain deposit insurance for a proposed industrial loan company (“ILC”), in order to strengthen the application before reapplying. The company stated that a parallel application with the Utah Department of Financial Institutions for the … Continue Reading

German Federal Financial Supervisory Authority Publishes Guidance on the Regulatory Framework for Cloud Services

The German Federal Financial Supervisory Authority (“BaFin”) recently published an article that provides guidance on the regulatory framework for cloud computing.  This is a follow-up to the circular letter Minimum Requirements for Risk Management (“MaRisk”), which was published in German in October 2017 and the circular letter Supervisory Requirements for IT in Financial Institutions (“BAIT”), … Continue Reading

The CFTC’s Active Week: Virtual Currencies in Focus

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

CFTC Issues Advisory Regarding Virtual Currency Derivatives

Earlier this week, the CFTC published a staff advisory regarding virtual currency derivative product listings. The guidance sets forth five areas of focus for exchanges and clearinghouses in listing a new virtual currency derivatives contract pursuant to Commission Regulation 40.2 or 40.3, including: (1) enhanced market surveillance, (2) coordination with CFTC staff, (3) large trader … Continue Reading

Cboe Contributes to Ongoing Discussion Regarding Cryptocurrency ETPs

Last month, Cboe Global Markets, Inc. (“Cboe”) responded to a staff letter on cryptocurrency funds and related investment products published by the SEC earlier this year. The SEC staff letter recognized that proponents of cryptocurrencies have identified a range of potential benefits and that innovation is important, but the SEC also identified a number of … Continue Reading

Arizona Creates Sandbox Program for Fintech

Arizona recently became the first state in the U.S. to create a “regulatory sandbox” program to facilitate the development of innovative financial products and services, which either incorporate new or emerging technology or reimagine uses of existing technology. Arizona H.B. 2434 requires the State Attorney General to establish a sandbox program to which entrepreneurs may … Continue Reading

GAO Publishes Report on Fintech Regulation

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

Overlap Between the GDPR and PSD2

The Payment Services Directive (PSD2), which took effect on January 13, 2018, puts an obligation on banks to give Third Party Providers (TPPs) access to a customer’s payment account data, provided the customer expressly consents to such disclosure. The new legislation is intended to improve competition and innovation in the EU market for payment services. … Continue Reading

FinCEN Extends Regulations to Initial Coin Offerings

On March 6, 2018, the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) released its response to Senator Ron Wyden’s (D-OR) request for information relating to FinCEN’s oversight and enforcement of virtual currency activities.  In the letter, FinCEN outlined its intent to regulate certain operators of initial coin offerings (“ICOs”) as money transmitters subject … Continue Reading

Advancing Blockchain Cybersecurity: Technical and Policy Considerations for the Financial Services Industry

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

FCC: Bitcoin Mining Equipment is Causing Interference to T-Mobile in Brooklyn

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

CSBS Announces Multi-State Compact to Standardize Money Transmitter Licensing

On February 6, 2018, the Conference of State Bank Supervisors (“CSBS”) – the nationwide organization representing banking regulators from all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands – announced that seven states have agreed to a compact that standardizes five major areas of the licensing process for money … Continue Reading

New York State Department of Financial Services Issues Guidance on Fraud and Market Manipulation in Virtual Currency Markets

On February 7, 2018, the New York State Department of Financial Services (“DFS”) issued guidance for all virtual currency business entities (“VCBEs”) regarding the prevention of market manipulation and other wrongful activity. In a brief, two-page document, the DFS: (1) emphasized the importance of effectively preventing and responding to fraud and similar wrongdoing; (2) stated … Continue Reading

SEC Chairman Issues Statement on Cryptocurrencies and Initial Coin Offerings

On December 11, 2017, SEC Chairman Jay Clayton issued a Statement on Cryptocurrencies and Initial Coin Offerings (the “Statement”) reflecting his own views on cryptocurrencies and initial coin offerings (“ICOs”)* and their relationship to federal securities laws.  The Chairman’s Statement follows three separate public enforcement actions brought by the SEC since September 2017 involving ICOs. … Continue Reading

CFPB Issues Principles for Consumer-Authorized Access of Financial Data

On October 18, 2017, the Consumer Financial Protection Bureau issued “Consumer Protection Principles” for protecting consumers’ interests in the context of consumer-authorized data sharing and aggregation. The principles are related to the Request for Information that the Bureau issued in connection with section 1033 of the Dodd-Frank Act late last year. The Consumer Protection Principles … Continue Reading

SEC Brings Enforcement Action Against Two Companies Related to Initial Coin Offerings

On September 29, 2017, the U.S. Securities and Exchange Commission filed a complaint in federal court against REcoin Group Foundation, LLC (“REcoin”); DRC World, Inc., also known as Diamond Reserve Club (“DRC”); and their principal, Maksim Zaslavskiy. The complaint alleges false and misleading statements and violations of securities laws in connection with initial coin offerings … Continue Reading
LexBlog