U.S. government agencies continue to take action against cryptocurrency mixing services that enable cybercriminals to obfuscate the trail of stolen proceeds on public blockchains stemming from illicit cyber activity. On November 29, 2023, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) sanctioned another virtual currency mixing

On 7 September 2023, the United Kingdom’s Financial Conduct Authority (“FCA”) set expectations ahead of its new financial promotion rules for cryptoassets (which we wrote about here).

From 8 October 2023, new rules for the marketing of cryptoassets come into force. The new requirements include the need for marketing

In its February 2023 discussion paper (DP23/2) relating to the UK regulatory regime for asset management, the UK’s Financial Conduct Authority (“FCA”) briefly touched on fund tokenisation as an area of technological drive and change in the fund management industry. Please refer here to our update on that discussion paper.

On July 12, 2023,  U.S. Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-N.Y.) proposed a revised version of their previously introduced crypto regulation bill to create better safeguards for the crypto industry generally while adding new, stronger consumer protection provisions and AML provisions.  The Lummis-Gillibrand bill, also known as the Responsible Financial Innovation Act (“RFIA”), identifies the need for enhanced regulation of digital assets.  The proposal addresses this need, in part, by creating clearly defined regulatory roles for the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”), which are two of the leading regulatory bodies currently engaged in regulating the U.S. crypto market, as well as creating a new Customer Protection and Market Integrity Authority self-regulatory organization.  The need for greater clarity in the roles of the CFTC and the SEC and with respect to cryptocurrency regulations generally is certainly timely, given the recent CFTC actions against Blockratize, bZeroX (and its successor Ooki DAO), and others and recent high-profile SEC actions against major crypto exchanges.

It is not unusual for users of a platform or of software to challenge the enforceability of a company’s terms of use if they take issue with the company’s product or service and decide to bring suit. As most terms of use contain an arbitration clause (or mandated dispute resolution process) and disclaimers of liability, the questions of user assent to and the overall enforceability of the terms of use become central issues early on in litigation. In each case, judges adjudicating legal challenges to site terms generally examine the circumstances behind the online contracting process closely – scrutinizing the user interface, the presentation of the terms and the reasonableness of the relevant provisions governing the transactions or online accounts at issue. In some instances, courts have ruled that online terms were unenforceable for a variety of reasons, often owing to the non-conspicuous presentation of the terms or that the terms themselves were in some way unconscionable or otherwise unenforceable. In one recent case, however, a federal judge in Georgia rejected a challenge brought by users of cryptocurrency exchange platform Coinbase Global, Inc. (“Coinbase”) and found Coinbase’s terms enforceable. (Kattula v. Coinbase Global, Inc., No. 22-3250 (N.D. Ga. July 6, 2023)).

The SEC suffered a significant loss last week in its ongoing legal battle with Ripple over the XRP digital token. While the District Court held that Ripple’s initial sales of XRP to institutional investors constituted the sale of unregistered securities, it was a Pyrrhic victory as the court held

On 8 June 2023, the UK Financial Conduct Authority (“FCA”) published a policy statement (PS23/6) on the financial promotion rules for cryptoassets (the “Policy Statement”). This is accompanied by a guidance consultation (GC23/1), where the FCA is seeking feedback on proposed guidance to the Policy Statement.