Blockchain & Smart Contracts – Page 4 – FinTech and Blockchain Law Watch

The SEC Expands its Enforcement Throughout the Digital Industry

Sep 23 2018

The Securities and Exchange Commission (“SEC” or “Commission”) is ramping up its enforcement efforts in the digital asset industry, expanding its focus to include digital asset brokers and investment companies. On September 11, the Commission issued an order against a digital asset hedge fund and announced a settlement with a self-described “ICO superstore” for violating federal securities laws. The Commission fined Crypto Asset Management LP and its principal for failing to register as an investment company, among other things. According to the SEC, Crypto Asset Management, which trades digital assets exclusively, is an investment company pursuant to the Investment Company Act because it “invest[s], reinvest[s], own[s], hold[s] or trad[es] in securities.”

NYAG Report on Virtual Markets

Sep 21 2018

By Robert M. Crea

On September 18, 2018, the NY Attorney General’s office (“OAG”) published its Virtual Markets Integrity Initiative report (the “Report”) (found here). The Report includes findings from the OAG’s April 2018 fact-finding inquiry (the “Initiative”) into the policies and practices of various virtual asset trading platforms. The Report is anything but positive.

The Report expresses a number of concerns with the following key findings:

many exchanges conduct business lines and operational roles creating potential conflicts of interest;
trading platforms have yet to implement serious efforts to impede abusive trading activity; and
protections for customer funds are often limited or illusory.

The Report identifies by name certain platforms that declined to participate in the April 2018 survey on the claim that they do not allow trading from New York. The Report acknowledges that the OAG has referred three of these platforms (Binance, Gate.io and Kraken) to the Department of Financial Services for potential violation of NY’s virtual currency regulations.

Blockchain-Based Businesses Receive Legislative Boost!

Aug 14 2018

By Cameron Abbott and Jessica McIntosh

The Midwestern state of Ohio has last week become one of the first states in the US to pass legislation which recognises the use of blockchain technology, and as a result blockchain data and transactions will now have legal bearing in the State of Ohio.

Governor John Kasich says the legislation was introduced with a clear focus, that is, to treat data and smart contracts stored through blockchain technology as electronic records and to promote the role of blockchain technology in a range of industries, not just through cryptocurrencies such as bitcoin. This legislative boost will allow the use of blockchain technology in various sectors from real estate to health care.

Court of the Blockchain Announced

Aug 01 2018

By Jonathan Lawrence

The Dubai International Financial Centre (DIFC) Courts have partnered with Smart Dubai to create what they say is the world’s first “Court of the Blockchain”. According to an announcement on 30 July, they will initially explore how to aid verification of court judgments for cross-border enforcement. They say they plan to create a blockchain-based court designed to streamline the judicial process, remove document duplications, and drive efficiencies. Future research announced will investigate handling disputes arising out of private and public blockchains and out of regulation and contractual terms encoded within smart contracts.

Australia’s first crypto-custody vault is open for business

Jul 25 2018

By Jim Bulling, Edwin Tan and Maria Downie

Australian companies Decentralised Capital and Custodian Vaults have recently announced a partnership to launch Australia’s first insured crypto-currency custody vault. This follows the earlier commencement of Coinbase’s crypto-custody service in the USA and Europe. These offerings are in response to growing investor demand for reliable and secure crypto-currency storage.

UK Law Commission: Smart Contract Research

Jul 24 2018

By Jonathan Lawrence

Published on 19 July, the UK Law Commission’s 2017-2018 Annual Report includes a section dedicated to a research project into smart contracts. The Commission is a statutory independent body. Its aims include the conduct of research and consultations in order to make systematic recommendations for consideration by the UK Parliament. The Commission defines “smart contracts” as the technology which runs on blockchain and by which legal contracts may be executed automatically, at least in part. The body says there is a compelling case for a Law Commission scoping study to review the current English legal framework as it applies to smart contracts. The project’s purpose would be to ensure that English law is sufficiently certain and flexible to apply in a global, digital context and to highlight any topics which lack clarity or certainty. The body has started its initial research and its main work will begin in summer 2018.

Conference Report – Blockchain and the Law: Towards a Responsible Blockchain Sector

Jun 22 2018

By Anthony R. G. Nolan and Julien E. F. Barbey

On June 14, Cardozo Law School in New York City held a conference entitled “Blockchain and the Law: Towards a Responsible Blockchain Sector.” The conference was led by a panel consisting of current and former commissioners and staff members of the SEC and the CFTC including Rob Cohen, director of the SEC’s enforcement division.

Among topics discussed was SEC Director William Hinman’s recent speech in which he stated that Ethereum is not a security. Panelists suggested this may indicate that the SEC would regard a token as being able to change its character over time, such that a token that was once a security can morph into one that is not a security. This would have important implications for market practices, potentially including the utility of SAFTs.

Amazon Unveils Plans to Provide Blockchain-as-a-Service

Jun 21 2018

By Warwick Andersen, Rob Pulham and Georgia Mills

Amazon Web Services (AWS) plans to be one of a handful of tech companies providing blockchain-as-a-service (BaaS) for customers wanting to test the new technology without the costs or risks of developing it in house. Other providers of BaaS include Microsoft, IBM, HP, Oracle and SAP.

AWS has partnered with Kaleido, a new blockchain business cloud service for enterprises. Kaleido will offer its cloud services to host an Enterprise Ethereum-based, open-source blockchain platform, making Kaleido the first managed blockchain SaaS available on AWS. The platform has been designed to be easy to use, as the uncertainty surrounding the new technology has prevented its widespread adoption.

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.

AUSTRAC, ATO and ASIC DISCUSS THEIR REGULATORY VIEWS ON ICO’S

Apr 20 2018

By Jim Bulling and Felix Charlesworth

On 16 April 2018, representatives from the Australian Securities and Investments Commission (ASIC), Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Tax Office (ATO) convened in Melbourne and delivered presentations outlining their regulatory views on Initial Coin Offerings (ICOs) and blockchain technology in general.

Category:Blockchain & Smart Contracts