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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 rise of cryptocurrencies and initial coin offerings (ICOs) undoubtedly shows that we live in interesting times that regularly present us with new and innovative products, markets, and opportunities. When the words “new” and “innovative” come to mind, the federal government is usually not part of the conversation.
On July 19, the Financial Crimes Enforcement Network (FinCEN), a bureau within the US Department of the Treasury responsible for the Bank Secrecy Act, issued guidance in the form of frequently asked questions (FAQs) regarding its recently adopted customer due diligence requirements (CDD Rule).
Last Friday, the US Securities and Exchange Commission (SEC) issued a notice stating that, effective in less than 70 days (July 31), broker-dealers will no longer be able to engage in leveraged foreign exchange (forex or FX) business with persons other than “eligible contract participants” as defined in Section 1a(18) of the Commodity Exchange Act (CEA), including those that are dually registered with the US Commodity Futures Trading Commission (CFTC) as Futures Commission Merchants (FCMs).
On May 5, the Financial Crimes Enforcement Network (FinCEN) announced final rules under the Bank Secrecy Act that enhance the customer due diligence obligations of banks, broker-dealers, mutual funds, futures commission merchants, and introducing brokers in commodities (collectively, Covered Financial Institutions).