Broker-dealer custody of on-blockchain assets has been a key hurdle in the development of a more regulated financial infrastructure for digital assets in the United States.  In a joint statement (the Joint Statement), the staffs of the SEC and FINRA outlined their concerns about broker-dealers’ ability to comply with
Continue Reading Davis Polk Client Memorandum: SEC and FINRA Staffs Highlight Broker-Dealer Regulatory Challenges Raised by Digital Assets—And Hint at Solutions

The Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) are increasing their focus on crypto assets and decentralized financial technologies (DeFi). Over the past week, the organizations published reports providing updates on, discussing developments in, and assessing risks relating to
Continue Reading The FSB and IOSCO Are Watching Crypto Assets and DeFi

Last week, the SEC staff published new detailed guidance on its views of when a digital asset may be considered a security, in the form of two documents:  a guidance “framework” issued by the SEC’s Strategic Hub for Innovation and Financial Technology and a no-action letter from the SEC’s Division
Continue Reading SEC Staff Doubles Down on Howey for Digital Assets

The Federal Reserve, FDIC and OCC (the Banking Agencies) recently published a proposal to increase the thresholds associated with the “major assets” prohibition governing management official interlocks contained in the Depository Institutions Management Interlocks Act (DIMIA)[1] and implemented by Regulation L.  DIMIA permits the Banking Agencies to raise the
Continue Reading Board Interlocks and Investment in the Banking Sector—The Federal Banking Regulators Propose to Raise the Asset Thresholds

Financial services regulatory reform will continue to evolve in 2018 and 2019.  As we observe the changing legislative landscape, here is the Post Midterm Election Edition of our reference tool, which provides context and summarizes current developments across a range of key regulatory areas, agencies and actors.  We will continue
Continue Reading Davis Polk Financial Services Regulatory Reform Tool—Post Midterm Election Edition

As we discuss in our memorandum released today and available here, the Hong Kong Securities and Futures Commission (“SFC”) last week took a significant step in its regulation of virtual asset activities by establishing a new, opt-in regulatory sandbox framework for virtual asset trading platform operators, proposing
Continue Reading SFC Announces Regulatory Framework for Virtual Asset Trading Platform Operators, Portfolio Managers and Fund Distributors

On October 25, 2018, the Shenzhen Court of International Arbitration (the “SCIA”) published a case analysis detailing its decision on a business contract dispute involving the possession and transfer of cryptocurrencies. The arbitral panel found that although Bitcoin does not have the legal status equal to currency and
Continue Reading Chinese Arbitration Court Recognizes Bitcoin as Property Protected by Law

The regulation and operations of virtual currency exchanges are again in the spotlight, due to the new report issued by the Office of the New York Attorney General (OAG).  The report, which follows the April launch by the OAG of its Virtual Markets Integrity Initiative (VMII
Continue Reading The New York AG Weighs In On Virtual Currency Exchanges

Financial services regulatory reform in 2018 continues to evolve.  As we leave summer behind, here is the Fall Focus edition of our reference tool, which provides context and summarizes current developments across a range of key regulatory areas, agencies and actors.  We will continue to track these issues and will
Continue Reading Davis Polk Financial Services Regulatory Reform Tool—Fall Focus Edition