2023 – Page 2 – FinTech and Blockchain Law Watch

Connecticut Stifles Employees’ Access to their Earned Wages

Sep 25 2023

Earned Wage Access (or EWA) programs are popular programs that allow employees to access their salary or wages that have already been earned, prior to the scheduled payroll date. Many argue that these beneficial programs are not truly “loans” because employees are accessing their own money without paying the high fees charged by payday lenders. However, some state regulators disagree, making EWA programs more difficult to access, depending on what state in which the employee lives.

New FTC Guidance: The INFORM Consumers Act’s Impact on Online Marketplaces’ Third-Party Sellers

Sep 01 2023

By Adam Husik and John ReVeal

The Federal Trade Commission (FTC) has issued guidance on how the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (the “INFORM Consumers Act” or “Act”) may impact online sellers who offer consumer products through online marketplaces.

The Act, as described in our prior blog post, is aimed at addressing consumer complaints about online purchases of stolen, counterfeit, or defective products. As of the Act’s 27 June 2023 effective date, online marketplaces are now generally required to obtain, verify, and disclose certain financial and business information about high-volume sellers on their platforms.

An SEC First: NFTs are Sold as Securities

Aug 29 2023

By Drew Hinkes, Eden Rohrer, and Josh Durham

On 28 August 2023, in its first enforcement action for securities registration violations brought against an issuer of NFTs, the SEC settled with media and entertainment company, Impact Theory, LLC (Impact).

The settlement order included findings that from 13 October 2021 to 6 December 2021, Impact sold non-fungible tokens called Founder’s Keys (KeyNFTs) raising approximately US$30 million. Broadly interpreting Howey, the SEC found that the NFTs were sold in investment contracts, based on the company’s public statements about the expected rise in value of the NFTs and its use of profits from sales to develop the company.

First SEC Enforcement Action Arising Out of the New Marketing Rule Targets FinTech Investment Advisor Titan Global Management

Aug 25 2023

By Judie Rinearson, Richard Kerr, and Josh Durham

Effective in 2022, the SEC adopted a new Marketing Rule for investment advisers to modernize the regulation of investment adviser advertising and solicitation practices. The adoption of the new Marketing Rule was the first substantive amendment to Rule 206(4)-1 under the Investment Advisers Act of 1940 since its adoption in 1961. A discussion of the impact of the new Marketing Rule can be found here.

SDNY Rules Ripple’s XRP token is NOT a Security

Jul 13 2023

By Andrew Hinkes and Eden Rohrer

On July 13, 2023, in a long awaited decision in Securities and Exchange Commission v. Ripple Labs, Inc., Bradley Garlinghouse and Christian A. Larsen, Judge Analisa Torres of the United States District Court for the Southern District of New York ruled on the cross-summary judgement motions finding that Defendant Ripple Labs’ XRP Token is not a security, handing the SEC a stunning defeat on many arguments that have been advanced by the SEC in multiple enforcement actions affecting issuers and exchanges of digital assets.

Australia: Payments Reform – Generational Change Coming

Jun 19 2023

By Daniel Knight and Simon Kiburg

Earlier this month the government released a raft of documents on the future of payments regulation in Australia. These documents are:

A Strategic Plan for Australia’s Payments System – “Strategic Plan” (available at: https://treasury.gov.au/publication/p2023-404960)
the Payments System Modernisation (Licensing: Defining Payment Functions) – “Consultation Paper” (available at: https://treasury.gov.au/consultation/c2023-403207)
the Reforms to the Payments Systems (Regulation) Act 1998 Consultation Paper – “PSRA Consultation” (available at: https://treasury.gov.au/consultation/c2023-403206)

In this Blog Post we take a deeper look at some of the key proposals from the Consultation Papers and what they will mean for operators in the payments ecosystem.

Australia: Regulating AI in Australia – emerging issues

Jun 16 2023

By Daniel Knight, Cameron Abbott, Rob Pulham, Dadar Ahmadi-Pirshahid

Amid global calls for tailored regulation of artificial intelligence tools, the Australia Federal Government has released a discussion paper on the safe and responsible use of AI. The Government is consulting on what safeguards are needed to ensure Australia has an appropriate regulatory and governance framework.

SEC’s Stunning Enforcement Actions against Binance and Coinbase

Jun 07 2023

By Drew Hinkes, Cliff Histed, Judie Rinearson, Eden Rohrer, Max Black

In a stunning move, over the last two days, the Securities and Exchange Commission (“SEC”) has filed back-to-back enforcement actions against major crypto exchanges Binance (See https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-101.pdf) and Coinbase (See https://www.sec.gov/litigation/complaints/2023/comp-pr2023-102.pdf . This clearly indicates that the SEC is flexing its enforcement power over both international exchanges as well as those exchanges with a focus on the United States.

Australia: Expanding AML requirements for digital currency exchanges

Jun 07 2023

By Daniel Knight and Grace Hall

The Australian Government has committed to reforming Australia’s AML/CTF regime, with proposed reforms set to impact digital currency exchange (DCE) providers.

CFPB Raises Alarms Without Providing All the Facts

Jun 05 2023

By Judie Rinearson and Jeremy McLaughlin

The Consumer Financial Protection Bureau’s (CFPB) recent Consumer Alert was certainly well intentioned. Many consumers (including the authors) who hold funds in payment apps (such as Venmo and Paypal) should be made aware that the funds are usually NOT held in an FDIC-insured bank. But that doesn’t mean the funds are necessarily unprotected.

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