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The ongoing and accelerating pace of developments in the realm of cryptoassets in multiple jurisdictions warrants continual review and monitoring.
As readers of our blog are aware, courts and regulators are playing catch-up when it comes to cryptocurrencies, and to interpreting existing laws and regulations as applied to these new and innovative offerings.
The UK Financial Conduct Authority (FCA) issued a press release on August 7 announcing that it has joined 11 other financial regulators from around the world to create the Global Financial Innovation Network (GFIN), building on its proposals earlier in the year to create a “global sandbox.”
We write frequently about the SEC’s and the CFTC’s focus on cryptocurrencies, but potential issuers should also be alert to other oversight, including possible enforcement actions, from other regulators as well.
The UK Financial Conduct Authority (FCA) issued a press release on July 3 announcing the latest cohort of firms accepted into its regulatory sandbox. Twenty-nine firms were accepted, which represents the largest cohort to date. The sandbox, now in its fourth year, allows firms to test their products and services in a controlled environment, prior to use in the open market where they would be subject to the full suite of regulations and associated costs.
Since taking on the role in November 2017, Comptroller of the Currency Joseph Otting has been relatively circumspect regarding his views on the banking industry, bank regulation, and bank regulatory reform.

Arizona has become the first state in the United States to enact a law to create a “Fintech Sandbox” – a safe zone for fintech startups to test new applications and financial services otherwise subject to state money transmitter, banking, and similar licensing requirements without having to obtain a state license. Although other countries, such as the United Kingdom, Singapore, and Australia, have created similar fintech sandboxes, similar legislation or regulations thus far have not been adopted in the United States at the federal or state level.

Few topics in the financial news have gotten more attention recently than the rise of cryptocurrency and initial coin offerings (ICOs), which allow startups to raise money from users in exchange for digital currency. In 2017, ICOs raised more than $3 billion in funding, surpassing early-stage venture capital funding for internet companies, and solidifying ICOs as a financing strategy among tech entrepreneurs.
Less than a year after the Conference of State Bank Supervisors (CSBS) announced Vision 2020, an initiative to modernize state regulation for non-bank financial companies, the CSBS revealed plans to establish a standardized licensing practice for money services businesses.