Blockchain Legal Resource

On November 1, 2021, the President’s Working Group (PWG) released a long-awaited report on stablecoins (the “Report”).¹ The Report outlines a number of significant legislative recommendations for Congress to consider as well as a number of interim measures that agencies should adopt under their existing authorities to protect against prudential risks in the near-term.

What Happened: On October 15, 2021, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) issued “Sanctions Compliance Guidance for the Virtual Currency Industry” and related updated FAQs.

A recent dispute over trademark ownership to the name of meme-fueled Dogecoin highlights the importance of trademark rights in the ever-growing world of cryptocurrencies.

In 15 recent enforcement actions, the Commodity Futures Trading Commission (CFTC) announced charges against various digital asset exchanges for failure to register appropriately as futures commission merchants (FCMs). This series of actions is the latest in an ongoing regulatory crackdown across federal agencies involving cryptocurrency and other digital asset trading platforms.

On September 21, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an Updated Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments (the “Updated Advisory”) on the sanctions risks associated with facilitating ransomware payments.

On September 13, 2021, New York Attorney General (NYAG) Letitia James announced the entry of a default judgment against crypto platform Coinseed and its CEO. The default judgment includes broad injunctive relief against Coinseed’s future operations in New York state. The case is one of many that regulators have recently brought against crypto trading platforms.

On August 23, 2021, CFTC Commissioner Dawn Stump released a helpful primer on the CFTC’s regulatory authority over digital assets. The statement emphasizes that the CFTC does not typically regulate the spot market for cash commodities (including digital assets), and instead focuses on oversight of derivatives. But, Commissioner Stump cautioned that the CFTC does retain antifraud authority over the spot markets. Tracing through the CFTC’s authority (and that of other sister regulators) in ten steps, the statement concludes that “with respect to a digital asset, ask not ...

The National Credit Union Administration (NCUA) recently published a request for information in the Federal Register that encourages credit unions and other industry participants to provide information on the current and potential impact of digital assets and related technologies on federal credit unions.

In a settled enforcement case announced August 9, 2021, the SEC fined Poloniex, LLC, a crypto trading platform, for operating an unregistered securities exchange. Then, on August 10, 2021, the CFTC and FinCEN announced a settled enforcement case against crypto exchange BitMEX for anti-money laundering violations and failure to register with the CFTC as a trading platform. The cases highlight US regulators’ increased focus on cryptocurrency exchanges.

On July 20, 2021, New Jersey’s Acting Attorney General announced that the State’s Bureau of Securities issued a Summary Cease and Desist Order to stop BlockFi, Inc. from selling unregistered securities in the form of interest-bearing cryptocurrency accounts. While commentators frequently focus on the enforcement activities of the Securities and Exchange Commission in the crypto space, New Jersey’s action against DeFi platform BlockFi serves as a reminder that state securities regulators also actively police this marketplace.