New York State Attorney General Sues KuCoin for Allegedly Failing to Register as Securities and Commodities Broker-Dealer
March 9, 2023, the New York State Attorney General’s Office (NYAG) filed a lawsuit against crypto trading platform KuCoin. The lawsuit alleges that the platform failed to register as a securities and commodities broker-dealer and falsely represented itself as an exchange. The NYAG has claimed that the Ether (ETH) traded on the platform is a […]
New Jersey Legislation to Regulate Virtual Currencies Likely To Become Law
New Jersey is positioned to adopt seminal legislation that is sure to alter the regulatory dynamic for cryptocurrency-focused businesses that operate within the state. The Digital Asset and Blockchain Technology Act (Act) is the first of its kind within the state and comes in the wake of a momentous year for cryptocurrencies and the blockchain […]
The Federal Reserve Board Issues New Policy: A Level Playing Field for All Banks
On Friday, January 27, 2023, the Federal Reserve Board announced a new policy statement aimed at ensuring all banks with a federal supervisor receive equal treatment, regardless of their deposit insurance status. The policy statement applies to all activities of state member banks, but has specific restrictions for crypto-asset activities. Key Highlights of the Policy: […]
New York Issues New Guidance on Crypto Currency Custodial Structures
On January 23, 2023, New York Department of Financial Services (DFS) released regulatory guidance to better protect customers in the event of virtual currency insolvency. The guidance is not binding, but rather persuasive authority. The guidance applies to entities that have been licensed or chartered by DFS to handle virtual currency assets on behalf of […]
Michigan Suspends FTX Lend Money Transmitter License and Orders FTX US License as Expired
On January 10, 2023 by the Michigan Department of Insurance and Financial Services (DIFS), issued an order regarding two companies, West Realm Shires Services, Inc. dba FTX US (“FTX US”) and FTX Lend Inc. Both companies are related and held licenses under the Money Transmission Services Act (MTSA) and the Regulatory Loan Act (RLA) respectively. […]
Louisiana Adopts Virtual Currency License
Louisiana has become the first state to follow New York’s lead in issuing a crypto-specific license, accepting Louisiana Virtual Currency Business Activity (VCBA) license applications as of January 1, 2023. All entities engaged in “virtual currency business activity” need to obtain licensure by July 1, 2023, to continue operations, including entities that are currently licensed […]
CFPB Proposed New Rule to Establish Public Registry of “Take It Or Leave It” Contract Terms and Conditions
On January 11, 2023, the Consumer Financial Protection Bureau (CFPB) proposed a new rule to apparently shed light on the dark corners of the financial industry. The proposed rule would create a public registry of the fine print in the contracts offered by non-bank companies that fall under CFPB’s supervisory jurisdiction. These contracts, often referred […]
Coinbase Agrees To Settlement With New York Regulator
On January 4, 2023, the New York State Department of Financial Services issued a consent order against Coinbase, a virtual currency company. Pursuant to the consent order, Coinbase will be paying a $50 million penalty to the state of New York for failing to maintain a compliant program. The company has also agreed to invest […]
CFPB Issues Proposed Rule Imposing Reporting Requirements on Certain Non-Bank Entities: Possible Implications for Money Transmitters, Debt Relief and Credit Repair Service Providers
On December 12, 2022, the Consumer Financial Protection Bureau (CFPB) issued a proposed rule pursuant to its authority under the Consumer Financial Protection Act of 2010 (CFPA). This rule would require certain non-bank entities to register with the CFPB upon obtaining final orders and judgments issued by local, state, or federal consumer financial protection agencies […]
CFPB Issues Order Asserting its Authority to Investigate Cryptocurrency Lender
On November 22, 2022, the Consumer Financial Protection Bureau (CFPB) denied a petition by Nexo Financial LLC (“Nexo Financial”) to modify a Civil Investigative Demand (CID) issued on December 1 2021. In rendering its decision, the CFPB rejected Nexo Financial’s claim that the CFPB lacks authority to investigate their crypto-lending products, including its “Earn Interest […]
NY Attorney General’s Office Fall Round-Up: AG Letitia James’ Actions & Initiatives Related to Cryptocurrency Since August 2021
On November 15, 2022, the New York Attorney General’s Office released its Fall Round-Up (“Round-Up”) describing major actions and initiatives implemented by New York Attorney General Letitia James (“AG James”) since August 2021. Among others, the Round-Up discusses actions and initiatives AG James has undertaken related to cryptocurrency, including investment in cryptocurrency, cryptocurrency exchanges, and […]
CFPB Releases Complaint Bulletin Analyzing Crypto-Asset Consumer Complaints; Tips for Consumers to Protect Themselves from Crypto-Asset Fraud and Theft
On November 10, 2022 the Consumer Financial Protection Bureau (CFPB) released a complaint bulletin (“bulletin”) that provides an analysis of consumer complaints the CFPB has received from October 2018 to September 2022 related to crypto-assets. The executive summary of the bulletin notes that during that time frame, the CFPB received more than 8,300 complaints related […]
Fifth Circuit Court of Appeals Finds CFPB Funding Mechanism Unconstitutional Violation of Appropriations Clause
On October 19, 2022, three judges in the Fifth Circuit Court of Appeals ruled that the funding mechanism of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. Specifically, the court found CFPB’s receivings funds upon the CFPB Director’s request to the Federal Reserve instead of through Congressional appropriations to violate the Appropriations Clause of the […]
Federal TCPA Regulatory Overview
What Is The TCPA? With its inception by Congress in 1991, the federal Telephone Consumer Protection Act (TCPA) is an attempt by Congress to exert greater protection over consumers from receiving unsolicited telemarketing.1 The TCPA was signed into law by President George H. W. Bush as Public Law 102-243. The TCPA limits the use of automatic […]
Proposed Digital Trading Clarity Act of 2022: What This Could Mean For The SEC’s Regulation Of Cryptocurrency
Summary of The Digital Clarity Act of 2022 The Digital Clarity Act of 2022, also known as S.5030, is a proposed legislation that seeks to create a temporary safe harbor for digital asset exchanges from SEC enforcement actions, clarify liabilities that exist under existing securities laws and clarify the classification of digital assets. If enacted […]
CFPB Issues Consent Order Against Nonbank Remittance Transfer Provider Following Findings of Remittance Transfer Rule Violations
An October 4, 2022 press release states that the Consumer Financial Protection Bureau (CFPB) issued a Consent Order against a nonbank remittance transfer provider (hereinafter, “the provider”). The press release explains that the order was issued subsequent to an examination of the provider that the CFPB conducted in 2020. The examination, as the press release […]