Blockchain Legal Resource

On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (the “Infrastructure Bill”), which significantly expands tax information reporting for certain cryptocurrency transactions. The Infrastructure Bill includes an information reporting requirement for cryptocurrency asset exchanges and custodians on an IRS Form 1099, and an information reporting requirement for certain persons who accept large payments in cryptocurrency in such person’s trade or business on an IRS Form 8300. The effective date of these changes will apply to any information return required to be filed after December 31, 2023.

On December 1, 2021, Freddie Mac published Bulletin 2021-36 for Freddie Mac sellers to provide updated guidance on eligibility criteria for qualifying mortgages. Freddie Mac publishes such bulletins on a regular basis for loan originators who wish to resell mortgages to Freddie Mac, and Bulletin 2021-36 covers a number of routine topics such as 2022 conforming loan limits, certain credit underwriting criteria and document custody. The bulletin is notable, however, because it specifically addresses requirements related to cryptocurrency’s use in the mortgage qualification process.

On November 23, 2021, the Senate Committee on Banking, Housing, and Urban Affairs sent a series of letters to prominent stablecoin issuers and cryptocurrency exchanges. Citing the recent President’s Working Group on Financial Markets report on stablecoins, the letters seek to clarify basic operational features of various stablecoins which the Committee believes is critical to improving its understanding of digital assets.

On 25 October 2021, the Dubai Financial Services Authority (DFSA), the regulatory body of the Dubai International Financial Centre (DIFC), announced that it implemented a regulatory framework for investment tokens issued or traded within the DIFC (Regulatory Framework for Investment Tokens), which follows from the Consultation Paper No. 138 (Regulation of Security Tokens) it issued earlier in March this year. Consequently, the UAE advances its status as a hub for technological innovation (and entrepreneurs); it fully embraces the global adoption of cryptocurrencies and blockchain technologies, as well as the demand for Investment Tokens, and the number of companies within the DIFC that are eager to issue, and trade in them, is steadily on the rise.

On November 8, 2021, law enforcement agencies in both the United States and European Union announced that a series of actions, including a number of arrests, were taken against the Russia-linked ransomware group, “REvil.” The U.S. Department of Justice (the “DOJ”) unsealed documents relating to an August indictment against two individuals in Dallas for alleged involvement in REvil ransomware attacks against several U.S. businesses. The European authorities, Europol, also announced that police in Romania and South Korea had arrested five people alleged to be REvil affiliates.

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.