Crypto advocates have worried for months about U.S. President Biden’s USD 1.2 trillion infrastructure bill, which includes tax and reporting requirements for transactions involving “digital assets” like cryptocurrencies and non-fungible tokens (NFTs). The U.S. Congress passed the infrastructure package on November 5,2021. Baker McKenzie Switzerland’s Chris Murrer along with other prominent crypto lawyers and professors address the digital asset provisions such as the criminal components and questions about the constitutionality of the new requirements. Find…
On October 28, the Financial Action Task Force (FATF) released a final version of the updates to its 2019 Guidance for a Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers (VASPs), which bear on anti-money laundering (AML), information gathering, reporting and other obligations. See our earlier post here. These updates, originally scheduled for release in June 2021, were postponed to allow additional time to consider and incorporate feedback from the virtual asset industry…
On October 18, the New York Attorney General announced that cease-and-desist letters were issued to two “[v]irtual or ‘crypto’ currency lending platforms”, directing the lending platforms to “immediately cease their unregistered and unlawful activities in New York.” The announcement states also that three other platforms were directed to immediately provide information about their activities and products. The announcement emphasizes that these actions by the New York Office of Attorney General (OAG) are intended to protect…
On October 6, 2021, the U.S. Department of Justice announced the launch of the National Cryptocurrency Enforcement Team (NCET) “to tackle complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.” Crypto mixing and tumbling services help users reduce traceability by obscuring the sources of their funds. As part of this announcement, the DOJ asserted that cryptocurrency is the “primary…
On September 24, 2021, the People’s Bank of China’s (PBOC) published a Q&A on its website stating, according to English translations of the original text, that all digital currency services for trading, order matching, token issuance and derivatives of virtual currencies are strictly prohibited. The Q&A stated further that overseas virtual currency exchanges that use the internet to offer services to domestic residents are also considered illegal financial activity, and employees working in China for…
It was big news when the U.S. Senate recently passed the $1 trillion infrastructure bill. One aspect of that bill was a revenue raising provision aimed at the cryptocurrency industry. In an article that was just published in Bloomberg’s Tax Management Memorandum, we look at the nuts and bolts of that provision, and take a deeper dive into the criticism of the bill by the cryptocurrency community, as well as the failed attempt to modify the bill…
Since the ICO boom in 2017, governments around the world began settling on different approaches to regulating the crypto industry. Many legislatures and regulators proactively drafted new laws, regulations, guidance and frameworks for the crypto industry. Others used investigatory authorities and enforcement actions to regulate the industry. We expect that governments around the world will remain active for the foreseeable future as cryptoassets become more mainstream. Baker McKenzie’s new guide, Crypto around the World, presents…
The U.S. Office of the Comptroller of the Currency (OCC) published a letter on January 4, 2021 (January 2021 Letter) clarifying the authority of national banks and thrift institutions (collectively, Banks) to participate in independent node verification networks (INVN) and use stablecoins to conduct payment activities and other bank-permissible functions. The January 2021 Letter follows a September 21, 2020 letter from the OCC (see our post here) which concludes that Banks may hold “reserves” on…
The U.S. Financial Crimes Enforcement Network (“FinCEN”) released a notice on December 31, 2020 (the “December 31 Notice”) stating that it will propose amendments to regulations of the Bank Secrecy Act (“BSA”) bearing on non-U.S. account holdings of virtual currency. FinCEN is a bureau of the U.S. Department of Treasury that, among other things, collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial…
An indictment unsealed on December 9, 2020 shows that cryptocurrency founder, Amir Bruno Elmaani (aka “Bruno Block”) has been charged with two counts of U.S. federal tax evasion. Elmaani is alleged to have made millions of dollars in income from the sale and exchange of cryptocurrencies but attempted to obscure his ownership of that income through various schemes and evaded reporting that income to the U.S. IRS. In September and October 2017, Elmaani, using his…