guidance – FinTech and Blockchain Law Watch

Crypto-asset Regulation Attracts the Attention of Global Securities Regulators

Jun 20 2019

By Jim Bulling, Edwin Tan and Andrew Fay

On 28 May 2019, the International Organization of Securities Commissions (IOSCO) published Consultation Paper CR02/2019 (Paper), which identifies the risks and regulatory considerations associated with the trading of crypto-assets on crypto-asset trading platforms (CTPs). The Paper seeks input from industry participants amid a growing demand for an international approach to the regulation of crypto-assets, recently illustrated by the G20’s joint request for global regulators to monitor risks and consider multilateral responses in relation to crypt-assets as needed.

UK FCA New Guidance on Cryptoassets

Feb 04 2019

By Jonathan Lawrence

The UK Financial Conduct Authority (FCA) has issued its consultation paper, Guidance on Cryptoassets. It focuses on where cryptoassets interact with the FCA’s regulatory “perimeter” (the perimeter). The guidance looks at where cryptoassets would be considered ‘Specified Investments’ under the Regulated Activities Order (RAO), ‘Financial Instruments’ such as ‘Transferable Securities’ under the Markets in Financial Instruments Directive II (MiFID II), or captured under the Payment Services Regulations (PSRs), or the E-Money Regulations (EMRs). It also covers where cryptoassets would not be considered ‘Specified Investments’ under the RAO. Comments on the consultation paper are requested by 5 April 2019.

Regulating Stablecoins: Certain Stablecoins are Now Subject to the Texas Money Services Act

Jan 08 2019

By Daniel S. Cohen

On January 2, the Texas Department of Banking (“DoB”) updated Supervisory Memorandum – 1037 (“Guidance”) which provides guidance regarding the application of the Texas Money Services Act (the “Act”) to virtual currencies. First issued on April 3, 2014, the Guidance divides virtual currency into two categories: centralized and decentralized.

Centralized virtual currencies are virtual currencies “created and issued by a specified source” that “rely on an entity with some form of authority or control over the currency”. Decentralized virtual currencies, on the other hand, are virtual currencies that do not have an administrator or a central repository.

Stablecoins are considered decentralized virtual currencies, provided they do not have an administrator or central repository. According to the Guidance, whether the Act applies to centralized virtual currencies requires a case-by-case determination. As for decentralized virtual currencies, the Guidance states that the Act only applies when sovereign currency is involved, and only in certain cases, because decentralized virtual currencies do not constitute money or monetary value.

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