2019 – FinTech and Blockchain Law Watch

The FDIC’s Recent Brokered Deposit Rulemaking Might Provide Relief to the Prepaid Industry

Dec 19 2019

On December 12, 2019, the Federal Deposit Insurance Corporation (“FDIC”) released a Notice of Proposed Rulemaking (“NPR”) to amend the brokered deposit regulation. While the proposed regulation will not eliminate the restrictions or remove all burdens from those institutions that accept brokered deposits, the NPR indicates that the FDIC has recognized that changes in technology call for changes in regulation. As a result, banks working with innovative prepaid payments companies to provide financial services might get some brokered deposit relief.

UK JURISDICTION TASKFORCE STATEMENT ON CRYPTO ASSETS AND SMART CONTRACTS – A “WATERSHED MOMENT”

Dec 19 2019

By Judith Rinearson and Philip Morgan

On November 18, 2019, Geoffrey Vos, Chancellor of the UK High Court, announced the launch of a “Legal Statement on Crypto Assets and Smart Contracts,” which he described as a “watershed moment” for English Law. The statement, which can be found here, brings new clarity to the likely status of both smart contracts and cryptocurrencies under English law.

A committee of experts has prepared the statement and, although technically it carries no binding legal authority, it is likely to be regarded as the most authoritative position available until the matters it covers are dealt with specifically by the English courts or by revised legislation.

To List or Not to List? NYDFS Seeks Comment on Proposed Rules Authorizing Bitlicensees to Self-Certify Cryptocurrency Listings

Dec 16 2019

Daniel S. Cohen and Jeremy M. McLaughlin

On December 11, 2019, the New York Department of Financial Services (“NYDFS”) published “Proposed Guidance Regarding Adoption or Listing of Virtual Currencies” (“Proposal”). The Proposal would establish a framework to allow “regulated virtual currency licensees” and entities exempt from licensure, such as trust companies, to offer or incorporate into their services cryptocurrencies that are:

pre-approved by NYDFS; or
certified by the licensee as being compliant with the licensee’s NYDFS-approved listing criteria.

The Proposal is intended to “enhance efficiency” and enable licensees to “offer and use new coins in a timely fashion”.

US Consumer Financial Protection Bureau Seeking Comments on Proposed Remittance Rule Revisions

Dec 12 2019

Jeremy M. McLaughlin and Daniel S. Cohen

On December 3, the United States Consumer Financial Protection Bureau (“CFPB”) published a notice of proposed rulemaking to revise the Remittance Rule (“Proposed Rule”) and is accepting comments until January 21, 2020. The proposal follows the CFPB’s April 2019 request for information on the Remittance Rule (see here for our previous discussion). The key provisions of the Proposed Rule address two aspects of the Remittance Rule: (1) the Rule’s applicability to a company that executes 100 or more remittances per year in the normal course of business, and (2) the Rule’s allowance for insured banks and credit unions to disclose estimates, rather than exact figures, under certain circumstances. This latter allowance is set to expire on July 21, 2020.

Japan’s New Crypto Regulation – 2019 Amendments to Payment Services Act and Financial Instruments and Exchange Act of Japan

Dec 02 2019

By Tsuguhito Omagari and Yuki Sako

Japan will fundamentally change its crypto asset regulations effective in spring of 2020.

In May, 2019, the National Diet, the Japanese national legislature, passed an amendment bill to the Payment Services Act (the “PSA”) and the Financial Instruments and Exchange Act (the “FIEA”), which was promulgated on June 7, 2019 (the “2019 Amendment”). The 2019 Amendment will become effective within one year from promulgation, following further rulemaking by the Japan Financial Services Agency (the “JFSA”) to implement the 2019 Amendment, which is anticipated sometime soon and includes public comment process.

OCC and FDIC Propose Rules to Confirm “Valid-When-Made” Doctrine

Nov 27 2019

By Rebecca Laird, Anthony Nolan and Daniel Cohen

Over the last two days, the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”) (together, the “Agencies”) each issued a proposed rule (collectively, the “Proposed Rules”) that would codify the Agencies’ position that the interest on a loan originated on a bank, if permissible when the loan was made, will continue to be a permissible and an enforceable term of the loan following the sale, assignment, or transfer of the loan. This is known as the “valid-when-made” doctrine.

International FinTech Watch: China Announced Positive Stance on Blockchain Technology

Nov 26 2019

By Jim Bulling and Wendy Li

On 24 October 2019, China President Xi Jinping expressed strong support for blockchain, which was depicted as “a core technology” to promote China’s industry innovation and digital economy development. In his speech, he also noted that blockchain technology has already been applied in a number of sectors like digital finance, internet of things, intelligent manufacturing and supply chain management, and that since China has a solid foundation of blockchain technology, it should seize the opportunity to build up blockchain industrial ecology and accelerate the integration of blockchain, AI, big data and other cutting edge technologies.

Open super in Australia: The Consumer Data Right could be extended to the superannuation industry

Nov 08 2019

By Jim Bulling and Rebecca Gill

On 23 October 2019, the Senate Committee on Financial Technology and Regulatory Technology (Committee) published an issues paper regarding its comprehensive inquiry into fintechs and regtechs in Australia. One aspect of the inquiry looks into the possibility of extending the Consumer Data Right (CDR) to the superannuation industry.

Proposed Regulations under the California Consumer Privacy Act

Oct 15 2019

By Linda Odom and John ReVeal

On October 10, 2019, the California Attorney General issued proposed regulations under the California Consumer Privacy Act (CCPA). The Attorney General will hold four public hearings, on December 2 through December 5, 2019, during which statements or comments may be presented, orally or in writing. Written comments in addition to those submitted at the public hearing also may be mailed or emailed to the Attorney General’s office until 5:00 p.m. on December 6, 2019.

Biometrics Replacing Passwords: Prospects and Concerns

Sep 05 2019

By Jim Bulling, Felix Charlesworth and Wendy Li

With the prevalence of smartphones in everyday life, momentum has been building for the use of biometrics to replace traditional passwords. To date, the most popular biometric authentication is fingerprint technology, followed by facial recognition technology. Less used types of biometrics also include eye-scanning, heartbeats and voice pattern.

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