Blockchain technology utilizes a distributed digital ledger to record and track information, and can be leveraged to gain transparency and certainty in transactions ranging from cryptocurrency to supply chain tracking. This blog provides information on the legal developments surrounding implementation of blockchain technology, with an initial focus on the financial services sector.
Concerned that virtual currencies and related products “may be attracting customers that do not fully understand their nature, the substantial risk of loss that could arise from trading them and the limitations of NFA’s oversight role,” the National Futures Association (“NFA”) is implementing new disclosure requirements for NFA Members engaging in virtual currency activities with customers.
A new law might provide blockchain companies a new way to raise funds. On May 22, 2018, the U.S. House of Representatives passed S. 2155, the “Economic Growth, Regulatory Relief, and Consumer Protection Act.” The Senate had passed the bill previously. The bill now goes to President Trump, who is expected to sign it into law.
The CFTC's Division of Market Oversight and Division of Clearing and Risk recently issued an advisory providing guidance to exchanges and clearinghouses regarding virtual currency derivatives to be listed or cleared. Entities already listing or clearing virtual currency derivatives, as well as those considering doing so, should be aware of the compliance and enforcement implications stemming from the advisory.
A cryptocurrency sweep announced by NASAA comes on the heels of an in-depth report from the Wall Street Journal on red flags in the ICO market.
Oral arguments in U.S. v. Zaslavskiy presented a federal judge with the question of whether an initial coin offering is governed by the securities laws.
As states continue investigating virtual currencies, New York is seeking information from virtual currency exchanges in an effort to promote investor education.