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Understanding the Effect of Wyoming’s Blockchain and Cryptocurrency Legislation

Jun 06 2018

By Carl E. Volz, Eden L. Rohrer, Judith E. Rinearson, Jeremy M. McLaughlin and Daniel S. Cohen

March was a busy month in the blockchain and cryptocurrency space for the Wyoming state government. The legislature passed, and the governor signed, five bills that many in the industry view as favorable to blockchain and cryptocurrency businesses. While the bills provide some beneficial clarity in this space and may attract businesses to the state, the scope and effect of some of the bills is limited. Accordingly, it is important that industry participants fully understand what the new Wyoming laws address, and, perhaps more importantly, what they do not.

Please see our latest thinking here for a full discussion of Wyoming’s new blockchain and cryptocurrency legislation.

OCC Expected to Release Guidance on FinTech Charter in July 2018

May 30 2018

By Eric A. Love and Dan Cohen

On May 24, 2018, Comptroller of the Currency Joseph Otting indicated during a press call that the Office of the Comptroller of the Currency (“OCC”) will release guidance in July 2018 on whether it will move forward with issuing a special purpose charter to FinTech companies. According to press reports, Comptroller Otting had previously indicated that the OCC hasn’t yet made a final decision about issuance of a FinTech charter, although he had also signaled that guidance from the OCC on the matter could be released as early as June. His more recent comments during the press call extend this timetable by a month.

Augmented Reality: Coming to a Store Near You?

May 29 2018

By Cameron Abbott, Warwick Anderson and Georgia Mills

Recent moves from PayPal and Target have brought fresh attention to the use of augmented reality (AR) in commercial settings. The technology remains in its infant stage but the revival of PayPal’s patent for payment-enabled AR glasses has some analysts wondering how close the technology is to becoming the mainstream.

The software described in the patent would give consumers with the glasses access to product and purchasing data simply by looking at an item on a store shelf.

Commissioner Peirce Remarks on the Challenges of Cryptocurrency Regulation

May 16 2018

By Andrew Massey, C. Todd Gibson , Philip J. Morgan and Evan J. Glover

On May 2, 2018, Commissioner Hester Peirce shared her views regarding how cryptocurrencies fit within the regulatory landscape of the United States Securities and Exchange Commission (“SEC”). Click here for the full remarks.

Commissioner Peirce, recognizing that not all tokens are alike, acknowledged that the appropriate regulatory scheme for cryptocurrencies will be the product of a function over form analysis. Additionally, Peirce noted that the functionality of a token changes over time, requiring a more nuanced regulatory scheme to ensure market safety.

Federal Government to implement Open Banking regime in Australia

May 15 2018

Jim Bulling, Daniel Knight and Felix Charlesworth

On 9 May 2018, the Australian Government confirmed their decision to establish an Australian Open Banking regime and implement the recommendations set out in the Farrell Report titled “Review into Open Banking in Australia”. This follows the Government’s report into Open Banking released in February 2018 which broadly supported the creation of a new data-sharing regime in the financial services industry. The Australian Government has set aside roughly $45 million over four years to develop the creation of a Consumer Data Right which includes the establishment of the Open Banking framework.

U.S. Government Accountability Office Issues Recommendations on FinTech Regulation

May 14 2018

By Judith Rinearson and Eric A. Love

The U.S. GAO issued its anticipated 132-page report entitled “Financial Technology: Additional Steps by Regulators Could Better Protect Consumers and Aid Regulatory Oversight.” In the report, the GAO describes the benefits and risks; regulatory oversight and challenges; and regulatory efforts to foster innovation with respect to the following four specified FinTech activities: person to person payments, marketplace lending, digital wealth management and distributed ledger technology. It also offers recommendations about how to enhance FinTech regulation.

A Regulatory Sandbox for FinTech Innovation Emerges on the U.S. Playground: What It Means for Money Transmitters

May 11 2018

By Eric A. Love and Judith Rinearson

Many FinTechs have benefited from government-established regulatory sandboxes in diverse jurisdictions such as Australia, the UK and Singapore. However, the U.S. has been noticeably slow to adapt these innovation-friendly programs. That is now changing.

Arizona recently enacted a new law (H.B. 2434) to create a Regulatory Sandbox Program (the “Program”) that will allow FinTech companies to temporarily test innovative financial products and services without being subject to money transmitter and similar licensing requirements in that state. The Program will be administered by the Arizona Attorney General (the “AG”) and is the first of its kind among U.S. states.

US Court signals that proving data breach class actions will be difficult

May 10 2018

By Andrew C. Glass, David D. Christensen, Cameron Abbott and Matthew N. Lowe

In the US, several attempts at class actions for those affected by a data breach have failed challenges in early procedural stages. In Dieffenbach v. Barnes & Noble, Inc., 887 F.3d 826 (7th Cir. Apr. 11, 2018), the Seventh Circuit allowed a data breach class action to survive the pleadings stage. At the same time, the Court indicated that the plaintiffs may have a tough time proving their claims on the merits or establishing that class certification is warranted. At the end of the day, the Dieffenbach decision may prove to be less of a boon and more of a bust for plaintiffs in data breach class actions. Although it may provide a means to get into court, the decision makes clear that obtaining a favorable outcome may be a “difficult task.” For a full summary of the Dieffenbach decision please see our client alert here.

U.S. District Court for DC Dismisses CSBS’ Challenge regarding Federal FinTech Charter, All Eyes on the OCC

May 08 2018

By Dan Cohen and Eric Love

The U.S. District Court for the District of Columbia recently granted the Office of the Comptroller of the Currency’s (“OCC”) motion to dismiss a lawsuit brought by the Conference of State Bank Supervisors (“CSBS”) challenging the OCC’s authority to issue special purpose charters to FinTech companies. According to the court, the CSBS currently lacks standing to bring the action because the OCC has not to-date issued such a charter.

Restricted ADI Licensing Scheme Commences in Australia

May 08 2018

By Jim Bulling and Edwin Tan

Last Friday, the Australian Prudential Regulation Authority (APRA) finalised its new Restricted Authorised Deposit-taking Institution (ADI) licensing process in Australia that came into effect immediately. New entrants to the banking industry will be able to apply for a Restricted ADI licence, which will have a lower barrier to entry than a full ADI licence, to assist their transition into the industry over a two-year period. This is a significant change as only one ADI licence has been granted to a non existing bank-affiliated entity in the past decade, which has rendered Australia’s start-up banking sector effectively non-existent.

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