On February 29, 2024, the U.S. House of Representatives Financial Services Committee passed a resolution (H.J. Res. 109) which, if enacted, would undo the recent US Security and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 121 (“SAB 121”). It acted under the Congressional Review Act (“CRA”), which allows Congress to use their oversight authority to overturn rules issued by federal agencies. SAB 121 requires reporting entities which perform custodial duties in relation to crypto assets…
Along with its update on the regulation of fiat-backed stablecoins and the failure of systemic digital settlement asset firms (see related post here), on 30 October 2023, HM Treasury issued a policy statement on its approach to the future regulation of a wider range of cryptoassets. The Treasury’s statement largely confirms that it intends to implement the proposals consulted on in February 2023 – moving to a licensing regime for crypto activities and bringing a…
After several years of intense debate, during its session on 16 May 2023, the European Council finally approved the Regulation on Markets in Crypto-Assets (MiCA). The EU’s first legal framework for crypto now only requires publication in the Official Journal of the European Union, which is expected to happen any time soon. MiCA brings a substantial change to the EU regulatory landscape, creating a harmonized regime in terms of issuance and the provision of services in…
On April 14, 2023, the United States Securities and Exchange Commission (“SEC”) reopened the comment period and provided supplemental information on proposed amendments to Rule 3b-16 under the Securities Exchange Act of 1934 (“Exchange Act”) which defines certain terms used in the definition of “exchange” in Section 3(a)(1) of the Exchange Act.. The reopening is primarily intended to address the significant comments received by the SEC in response to the initial proposal, many of which…
On April 17, 2023, the U.S Securities and Exchange Commission charged crypto asset trading platform Bittrex, Inc. and its co-founder and former CEO William Shihara. with operating an unregistered national securities exchange, broker, and clearing agency. It also charged Bittrex, Inc.’s foreign affiliate, Bittrex Global GmbH, with failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex. The complaint was filed in federal court…
In July 2022, the Law Commission published a consultation proposing certain reforms in respect of property rights and digital assets. The consultation’s primary recommendation was to create a new category of property, referred to as data objects, to ensure that cryptocurrency and other forms of digital assets could be legally recognised as property. This approach builds upon previous court rulings which held that cryptoassets could be property and be protected by injunctions, such as freezing…
On April 7, 2022, the US Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter (“FIL”) requiring that all FDIC-supervised institutions that intend to engage in, or that are engaged in, any activities involving or related to crypto assets notify the FDIC. Because the overwhelming majority of U.S. banks are insured by the FDIC, the FIL means that nearly all banks must now disclose their crypto activities to the FDIC. The definition of crypto…
On January 17, 2022, the Spanish Official State Gazette (BOE) published the new Circular 1/2022 of the National Securities Market Commission (CNMV) on the advertising of cryptoassets presented as investments (the Circular). The Circular is aimed at developing the rules, principles and criteria to which cryptoasset advertising will be subject. It defines the types of entities and assets included in its scope and the powers granted to the CNMV, so it can supervise and control…
On 31 March 2021, the UK tax authorities (HMRC) consolidated their existing guidance on crypto-asset taxation for businesses and individuals and published new guidance on the taxation of “staking” activities. This is contained in a new manual (guidance for HMRC officers which is publicly available online but which does not have the force of law). The new guidance on staking activities is almost identical to the existing guidance on mining, but the fact that HMRC…
On 7 January 2021 HM Treasury (HMT) published a consultation and call for evidence on the regulatory approach to cryptoassets and stablecoins. The consultation represents the first stage in HMT’s consultative process on the broader regulatory approach to cryptoassets and stablecoins. The consultation closed on 21 March 2021. Baker McKenzie’s crypto regulatory experts have published a briefing that explores the policy background underlying the consultation, sets out the key points of HMT’s proposals, and provides a comparison to…