FinTech and Blockchain Law Watch – Page 6 – At the Crossroads of Law, Innovation and Commerce

The CFPB Proposes New Credit Card Late Fee Limits

Feb 09 2023

On February 1, 2023, the CFPB proposed new rules to reduce the late fees that credit card issuers may charge to consumers (the “Proposed Rules”). The CFPB refers to current late fees as “over the top” and “exorbitant.” The CFPB indicates that it believes it has the authority to limit late fees under the CARD Act of 2009, which amended the Truth in Lending Act to require that late fees and other penalty fees be “reasonable and proportional to” the consumer’s violation of the cardholder agreement.

“MetaBirkin” NFT Maker Liable in TM Dispute

Feb 08 2023

By Terrance D. Roberts

On February 8, 2023, a Manhattan federal jury found Mason Rothschild liable for trademark infringement for his non-fungible tokens (“NFTs”) called ‘MetaBirkins’. After only 3 days of deliberation, the 9 person jury sided with Hermѐs International and found Rothschild liable for trademark infringement, trademark dilution, and for unlawfully cybersquatting on the domain name MetaBirkins.com.

UK Regulation of Cryptoassets – Another Glimpse but Still None the Wiser

Feb 03 2023

By Kai Zhang and Judie Rinearson

On 1 February, UK Government commenced another consultation on regulating cryptoassets (other initiatives consulted earlier remain being considered/legislated) which will close on 30 April. This is a consultation on the overall policy approach, i.e. no detailed rules.

Federal Reserve Issues Policy Statement Limiting Crypto-Activities of State Member Banks

Jan 27 2023

By Grant F. Butler, Carly E. Howard, Andrew M. Hinkes

The Board of Governors of the Federal Reserve (the “FRB”) issued a policy statement that interprets Section 9(13) of the Federal Reserve Act to limit state member banks to engage as principal in only activities that are (a) permissible for a national bank or (b) explicitly permissible for state banks under federal law. The activity restrictions apply equally to insured and uninsured state member banks supervised directly by the FRB.

DeFi Regulatory Alert: CFTC Files Its First Ever Oracle Manipulation Case

Jan 11 2023

By Andrew M. Hinkes, Clifford C. Histed, Cheryl L. Isaac, and Maxwell J. Black

The Commodity Futures Trading Commission (“CFTC”) filed a civil enforcement action this week against Avraham Eisenberg, charging him with a scheme to defraud others and engage in price manipulation (as announced by the CFTC here). While there have been other enforcement actions related to decentralized finance (“DeFi”) protocols, this is the first case in which the CFTC has charged a person for fraud in connection with “oracle manipulation” on a decentralized exchange. In addition to this CFTC action, the U.S. Department of Justice previously charged Eisenberg with criminal fraud and commodity price manipulation in connection with this same alleged scheme.

“Joint Statement on Crypto-Asset Risks to Banking Organizations” Will Significantly Impact Cryptocurrency Companies and Their Banking Relationships

Jan 04 2023

By Grant F. Butler, Andrew M. Hinkes, Jeremy McLaughlin, Judie Rinearson

The US Board of Governors of the Federal Reserve System (FRB), Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) (the “Agencies”) today issued a joint statement reiterating their ongoing concerns with crypto-asset activities entering the banking sector. See: https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20230103a1.pdf

Alaska Will Require Licensing for Crypto Money Transmitters

Dec 27 2022

By Jeremy M. McLaughlin and Brenden R. Chainey

On November 30, Alaska amended its money transmitter regulations to, among other things, include virtual currency transactions within the definition of money transmission. With this new change (effective January 1, 2023), companies engaged in money transmission involving virtual currency will be required to obtain a money transmission license.

CFTC Ordered to Serve Former Founders in Ooki DAO Case

Dec 20 2022

By Andrew M. Hinkes, Clifford C. Histed, Carly E. Howard, Cheryl L. Isaac, Maxwell J. Black

Following the unprecedented Ooki DAO enforcement action by the Commodity Futures Trading Commission (“CFTC”), the district court, after entertaining argument by several amici, clarified its position on another novel legal issue in the DeFi space: how to serve process on a DAO. On 12 December 2022, the United States District Court for the Northern District of California ordered the CFTC, as part of its efforts to serve the OOKI Dao, to personally serve the former founders of Ooki DAO as individually identifiable token holders.

Renewed Era of Crypto Assets Growth in Hong Kong

Dec 13 2022

By Jay Lee

Recently, Hong Kong, through its Financial Services and the Treasury Bureau, pronounced a Policy Statement on Development of Virtual Assets (“VA”) in Hong Kong (the “Policy Statement”), which sets out the government’s vision and next steps to help grow Hong Kong’s VA sector again. Hong Kong hopes to develop “a vibrant sector and ecosystem” for VA in the future. The positions set forth in the Policy Statement are widely welcomed by market participants, who hope it will attract more talented crypto-related businesses back to Hong Kong.

California Legislators Continue To Assess How To Regulate Digital Assets

Aug 30 2022

By Jeremy McLaughlin and Josh Durham

For the fifth time since June 2022, California Senators have amended their proposed “Digital Financial Assets Law,” signaling a genuine desire to pass the bill as the Senate inches toward workable legislation.