Cryptocurrencies & ICOs – Page 13 – FinTech and Blockchain Law Watch

AML review targets digital currencies

May 17 2016

The Australian Attorney General’s Department (AG) has released its statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML Act). Recommendations have been made to better incorporate digital wallets and digital currencies in the AML Act.

The AG has recommended that:

the AML Act be amended to ensure that digital wallets are comprehensively captured. Some digital wallets are already caught by the AML Act where they are considered to be ‘accounts’ provided by traditional financial product providers such as banks and credit unions. However, a potential regulatory gap was identified for new types of digital wallets inspired by technological advances. For example, digital wallets which store digital currency are not regulated under the AML Act;

CFPB Takes Aim at Marketplace Lenders

May 16 2016

By David Christensen

Last Fall, in its 2015 Rulemaking Agenda, the Consumer Financial Protection Bureau (“CFPB”) signaled its intent to “to develop rules to define larger participants in markets for consumer installment loans.”[1] Under the Dodd-Frank Act, the CFPB is authorized to issue “larger participant” rules to define entities in a particular market for consumer financial products or services. The issuance of such rules opens the door for supervisory and examination authority over such entities. Fast forward to Spring 2016, when the CFPB announced that it is accepting complaints from consumers regarding alleged problems with online marketplace loans, and it appears that the CFPB has marketplace lenders squarely in its sights.[2]

Digital currency and GST

May 09 2016

By Jim Bulling and Michelle Chasser

The application of consumption tax to digital currencies varies between countries. The UK and countries in the EU have made Bitcoin exempt from such taxes, while other countries such as Japan, Singapore, Canada and Australia treat digital currencies as intangible property which is subject to the tax.

In Australia, this has resulted in consumers paying Goods and Services Tax (GST) when they exchange money for digital currencies and again when they use the digital currency to make a purchase. Treasury has released a discussion paper on the application of GST on digital currencies. While the proposals are very different technically, they both result in removing the double taxation.

New European virtual currency trade body

Apr 26 2016

By Jonathan Lawrence

A new trade body designed to aid regulatory understanding of virtual currencies has been launched in response to increased government interest in Europe.

The Brussels-based European Digital Currency & Blockchain Technology Forum (EDCAB) is a public policy platform for digital currencies and distributed ledger technologies. It also co-organised an industry expo for policymakers in the European Parliament from 18 to 21 April 2016.

Virtual currencies have rapidly risen up the European policy agenda in all the major institutions:

The Council of the European Union put virtual currencies at the top of a list of targeted areas for rapid progress at its February 2016 meeting, and has called for legislation to be tabled by the end of June 2016.
The European Parliament is preparing its own initiative report on virtual currencies, with the Committee on Economic and Monetary Affairs scheduled to vote on the report on 25 April 2016. Additionally, the Committee for Internal Market and Consumer Protection is also considering the issue later in April.
The European Commission has been considering regulation of virtual currencies through its Action Plan and proposals to combat terrorist financing, with legislation ready for the end of June 2016.

EU Fintech developments

Apr 19 2016

By Jacob Ghanty

In the linked article, Jacob Ghanty discusses some UK and EU regulatory developments affecting the FinTech sector. This article was first published on Thomson Reuters Regulatory Intelligence on 1 April 2016.

Lost cryptocurrency – Can you get your “money” back?

Apr 14 2016

By Jonathan Lawrence

Will English courts recognise cryptocurrency in tort and restitution claims? An article by Peter Susman QC in the March 2016 issue of the Butterworths Journal of International Banking and Financial Law considers that English common law is robust enough to facilitate the development of legal remedies for lost cryptocurrency (“Virtual money in the virtual bank: legal remedies for loss” (2016) 3 JIBFL 152).

A more complex issue is whether English law is ready to provide effective remedies in tort or restitution for misappropriated cryptocurrency. English courts have previously had difficulty applying criminal law to intangible assets. The Fraud Act 2006 helped remove any confusion by focusing on what has been done, rather than the type of property which has been affected.

So it should not be difficult to argue that the law of contract developed under English common law will apply on the same basis to cryptocurrencies. Principles developed under contract law may be used to answer questions about whether contractual obligations have been incurred, on what terms and what remedies may be available in relation to cryptocurrency.

In any event, many transactional and litigation lawyers tend to think of money less as personal property, and more as obligations owed by and to persons in respect of that money. The focus of courts should be then on remedies rather than proprietary rights.

PREPAID ACCESS GARNERS REGULATORY ATTENTION

Mar 25 2016

By Sean Mahoney

Bank regulators are paying more attention to the role of banks in the prepaid card industry as evidenced by their new guidance on the applicability of know your customer requirements and proposed regulations on record-keeping with respect to master deposit accounts for prepaid cards and other products utilizing “pass-through” deposit insurance.

To learn more about the Interagency Guidance to Issuing Banks on Applying Customer Identification Program Requirements to Holders of Prepaid Cards, which provides a framework to determine whether or not a bank must apply its customer information program to holders of prepaid products for which the bank is the issuer, please visit our Consumer Financial Services Watch Blog at Prepaid Access Garners Regulatory Attention.

Australian Government gets more FinTech friendly

Mar 23 2016

By Jim Bulling and Michelle Chasser

The Australian Government has released its responses to the industry’s priorities for fintech development which it has called “Backing Australian FinTech”. As well as affirming existing commitments, such as introducing a crowd sourced equity funding (CSEF) framework and an incubator support programme, the paper includes a number of initiatives that the Government proposes to undertake. New developments include:

introduction of an entrepreneur visa in November 2016 for foreign entrepreneurs with innovative ideas and financial backing from a third party;
possibly increasing the asset and turnover eligibility threshold for CSEF to A$25 million and reducing cooling off periods for investors to 48 hours;
consultation on a potential framework for crowd sourced debt funding;
increasing the maximum fund size of Early Stage Venture Capital Limited Partnerships (ESVCLPs) to A$200 million and providing a 10% tax offset on capital invested;
introduction of a mechanism to allow Innovation Australia to issue binding advice in relation to the definition of ineligible activities for ESVCLPs;
Productivity Commission inquiry into options for improving access to comprehensive credit reporting (CCR) data;
a regulatory guide for robo-advice providers;
possibly allowing licensed insurance brokers to sell insurance policies from unauthorised foreign insurers where they offer consumers a better price and appropriate consumer protection;
possibly applying anti-money laundering laws to digital currencies;
a commitment to address the ‘double taxation’ of using digital currency to purchase goods already subject to the Goods and Services Tax (GST);
establishment of a new Cyber Security Growth Centre; and
a ‘regulatory sandbox’ in Australia to allow FinTech start-ups to test their products and business models.

Backing Australian FinTech indicates that 2016 will be a busy year for fintech regulation in Australia.

Read Backing Australian FinTech here.

Japan Introduces Regulation on Bitcoin Exchanges

Mar 22 2016

By Ayuko Nemoto and Yuki Sako

To date, virtual currencies and related service providers remain unregulated in Japan. However, on March 4, 2016, the Cabinet of Japan approved an amendment bill to the Payment Services Act of Japan and submitted it to the Diet (“Amendment Bill”).

Most importantly, the Amendment Bill aims to bring the industry under the supervision of the Financial Services Agency of Japan (“FSA”) and introduce new registration requirements for virtual currencies exchanges, including those based outside of Japan that provide services to customers in Japan. Exchanges based outside of Japan may be registered as a “Foreign Exchange” if they are registered or licensed in their home jurisdiction; however, they must have an office in Japan and designate a “representative of Japan,” the failure of which would result in disqualification.

Payment Services and Money Transfer in the FinTech Space: What is Next?

Mar 04 2016

By Jacob Ghanty and Tom Wallace

On 23 February 2016 our London office hosted a seminar discussing the future of payments and money transfer and the opportunities and challenges for businesses in this space, featuring talks from leading industry experts Anthony Watson of Uphold Inc. and Jean-Stéphane Gourévitch of Matchi.biz, alongside our partners Jacob Ghanty and Tom Wallace. Find a link to the audio recording and slides of the event here.

Category:Cryptocurrencies & ICOs