FinTech and Blockchain Law Watch – Page 36 – At the Crossroads of Law, Innovation and Commerce

Monetary Authority of Singapore on Initial Coin Offerings

Aug 29 2017

On August 10, 2017, the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) jointly published a Consumer Advisory document which urged consumers to exercise due diligence before investing in digital tokens, with particular emphasis on the emergence of Initial Coin Offerings (ICOs). In Singapore, several ICOs have taken place in the past year and this has resulted in organisations raising millions of dollars in a few days since their launch.

An ICO is a crowdfunding method, facilitated by blockchain, through which a project or venture, usually a start-up organisation, raises funding by creating and selling its own digital asset, currency or token in exchange for digital currencies or assets of immediate value such as a Bitcoin. The practice is thus far unregulated and enables a new brand of alternative finance. An ICO campaign ‘runs’ for a defined period during which investors are able to support the project, with the aspiration that this digital asset becomes successful and their investment reaps profit.

APRA proposes reforms to the ADI Licencing Regime

Aug 23 2017

By Jim Bulling and Felix Charlesworth

On 15 August 2017, the Australian Prudential Regulating Authority (APRA) published a discussion paper entitled ‘Licensing: A phased approach to authorising new entrants to the banking industry‘. The Discussion Paper proposes changes to APRA’s licensing framework with the introduction of a new restricted ADI licences regime.

This phased approach enables entrants who require time to build resources and capabilities, such as fintech start-ups, to conduct banking related business by reducing conventional barriers to entry such as the requirement to hold at least $50 million in start-up capital.

Better late than never to the FinTech party

Aug 17 2017

By Cameron Abbott and Olivia Coburn

Oracle has finally realised that it wants to hang out with the cool FinTech kids on the block, having recently announced the release of its Oracle Banking Payments application programming interface (API) service.

Oracle’s move recognises the value of offering better ways for its banking clients to collaborate with FinTechs and other third parties.

RegTech and AML: New UK Report

Aug 14 2017

By Jonathan Lawrence

The UK Financial Conduct Authority (FCA) published a report on 2 August entitled “’New Technologies and Anti-Money Laundering Compliance”. The report details findings of three months of research by the authors PA Consulting. The work included over 40 interviews with regulated firms, technology providers, and other bodies. The report sets out respondents’ views on topics such as:

What are the key functions of new and emerging technologies related to anti-money laundering (AML) compliance, and how can they aid compliance activities?
What challenges do firms face in introducing new technologies?
What good practice examples and lessons are available for firms considering new compliance technologies?
What steps could the FCA take to encourage more innovation in AML compliance?

All in this together: New FinTech partnership in Abu Dhabi

Aug 11 2017

By Jonathan Lawrence

On 7 August, Abu Dhabi Global Market (ADGM), the International Financial Centre (IFC) in Abu Dhabi, and the Responsible Finance & Investment Foundation (RFI), a think tank for responsible finance, announced their entry into a partnership to help the growth and sustainability of the FinTech ecosystem through financial inclusion and ethical and responsible finance practices.

Both parties said that they would like to encourage entrepreneurship, foster ethical and responsible investments, and highlight opportunities for Islamic-compliant FinTech services and Islamic finance activities for the region and beyond. They will highlight emerging FinTech trends and support the development of innovative Shari’ah-compliant FinTech companies seeking to participate in the Middle East and African markets. The collaboration establishes an open platform for both RFI and ADGM to share expertise and knowledge and they say they will also work closely to enable and assist investors, FinTech entrepreneurs and innovation firms in testing and introducing innovative products, services and solutions. This will take place in the environment of the ADGM Reglab programme, a regulatory laboratory to accelerate FinTech Innovation.

European Banking Authority publishes FinTech discussion paper

Aug 10 2017

By Rizwan Qayyum

On 4 August 2017, the European Banking Authority (EBA) published a discussion paper on its approach to FinTech. To enable a better understanding and insight into the financial services offered and financial innovations being applied by FinTech firms within the European Union, the EBA undertook a FinTech mapping exercise. The EBA received responses from 22 Member States and two European Economic Area (EEA) states, and the discussion paper outlines the results of its EU-wide mapping exercise, the main financial services provided, regulatory status and proposals on future work on FinTech.

Dubai launches regulatory framework for crowdfunding

Aug 09 2017

By Jonathan Lawrence

On 1 August, the Dubai Financial Services Authority (DFSA) launched its regulatory framework for loan and investment-based crowdfunding platforms, the first such framework in a Gulf Cooperation Council country. The regulations aim to ensure clear governance for FinTech businesses and provide appropriate protection for their customers. They also formalise the DFSA’s approach to regulating crowdfunding platforms which had operated through interim arrangements since 2016. The framework has not been officially released as yet so we will publish a link to the regulations when available.

PSD2 major incident reporting guidelines

Aug 09 2017

By Judith Rinearson and Rizwan Qayyum

On July 27 2017, the European Banking Authority (EBA) published the Final Guidelines (the Guidelines) on major incident reporting under the revised Payment Services Directive (PSD2). The Guidelines were developed in conjunction with the European Central Bank (ECB), and are addressed to all payment services providers and competent authorities within the 28 European Union Member States. With the expected implementation of PSD2 in January 2018, the Guidelines further contribute to the objective of the PSD2 aiming to minimize disruption to its users, payment service providers and the systems.

Bitcoin thieves abound, but Law Enforcement is getting smart and stepping up

Aug 06 2017

By Clifford Histed and Nicole Mueller

According to a federal criminal complaint filed last month in Philadelphia, Theodore Price admitted that he had written software capable of stealing millions of dollars in bitcoins from individual bitcoin wallets. He allegedly admitted to purchasing the software on a dark net market and recoding it to infiltrate e-mail accounts with bitcoin wallets. Price also allegedly admitted that he had a fake passport in the name of the actor Jeremy Renner, and that Price had prepared to flee the U.S. on a private jet to evade arrest. Price is now in federal custody, charged with access device fraud and identity theft.

Hot Topic Briefing: Passport To The Regulators

Aug 06 2017

By Jonathan Lawrence

On 3 October, our London office will host an all-day event Hot Topic Briefing: Passport To The Regulators. The event has been put together by The Emerging Payments Association (EPA), a commercial membership association of payments industry players. It will consist of keynote presentations from and Q&As with the following six European Union regulators:

Cyprus
Denmark
Lithuania
Luxembourg
Malta
Spain

This event is a follow up to the EPA’s Passport To The Future report (launched in January 2017) that examined similar issues. It will give a platform to host regulators of potential home states for regulated entities, should full passporting from the UK no longer be possible. The regulators will present the process, options, costs and timelines for obtaining licences within their jurisdiction. The day is designed for the UK FinTech community and is an opportunity to hear from these regulators directly.