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…
In Ion Science Ltd. v Persons Unknown and others (unreported), the Commercial Court granted a proprietary injunction and a worldwide freezing order in respect of Bitcoin that had been dissipated by the wrongdoers due to cyber-fraud. The Commercial Court also granted permission to serve disclosure orders against the coin exchanges that processed the transactions in order to help locate the missing assets and wrongdoers. This judgment further solidifies Bitcoin’s status as property, but also shows…
The UK Financial Conduct Authority (FCA) has announced a ban on the sale of crypto-derivatives and exchange traded notes (ETNs) that reference certain types of crypto-assets (crypto-ETNs) to retail consumers. Firms who carry out marketing, distribution or selling activities in or from the UK of the relevant products to retail clients, will need to comply with these rules by 6 January 2021. The FCA’s policy statement and final rules can be found here. Which assets…
As we previously reported, in May 2020, the Ukrainian Ministry of Digital Transformation (MDT) carried out a public consultation in relation to the draft text for a law relating to virtual assets. On September 16, 2020, the Ukrainian Parliament registered the draft law “On Virtual Assets” (the “Draft Law,” available here in Ukrainian). One significant change brought about by the public consultation is that the Draft Law now defines a virtual asset as a separate…
On July 22, 2020, the Office of the Comptroller of the Currency (“OCC”) issued an interpretive letter confirming that national banks and savings associations may provide cryptocurrency custody and related services. National banks have long provided safekeeping and custody services for a wide variety of customer assets, including both physical objects and electronic assets, and the extension of these services to cryptocurrency is a modern form of these traditional activities. In the letter, the OCC…
Summary On December 13 2019, in the case of AA v Persons Unknown [2019] EWHC 3556 (Comm), the UK Commercial Court granted an interim proprietary injunction over Bitcoin, thereby confirming its status as property. Background In October 2019, cyber-attackers hacked into the computer system of a Canadian insurance company and installed malware which encrypted those systems, preventing anyone but the hackers from accessing them. The hackers then offered decryption software to the insurance company in…
A UK Government-backed, industry-led initiative has published an expert legal statement recognising cryptoassets as property and smart contracts as enforceable agreements under English law. The statement is published by the UK Jurisdiction Taskforce (UKJT), a taskforce of the UK’s Lawtech Delivery Panel. The report concludes that: Cryptoassets are, in principle, to be treated as property under English law. They are not disqualified from being property by their distinctive features (intangibility, cryptographic authentication, use of a…
The Securities and Futures Commission (“SFC”) has taken another major step towards establishing a regulatory framework for virtual asset trading platforms, and is now inviting licensing applications from platform operators who are willing and able to comply with new licensing criteria and continuing compliance requirements outlined in the SFC’s recently published Position Paper – Regulation of virtual asset trading platforms (“Position Paper”). Licensing applications are open from 6 November 2019. Background In November 2018, the…
IOSCO (the International Organization of Securities Commissions) has recently published a consultation focusing on how platforms which trade crypto-assets are regulated. The global standards setting body considers that promoting innovation must be balanced with appropriate regulatory oversight. For these purposes, IOSCO defines crypto-assets broadly as “a type of private asset that depends primarily on cryptography and DLT or similar technology as part of its perceived or inherent value, and can represent an asset such as…
On July 8, 2019, the staffs of the U.S. Securities and Exchange Commission’s Division of Trading and Markets and the Financial Industry Regulatory Authority (“FINRA”) issued a joint statement articulating various considerations relevant to questions they had received concerning the application of the federal securities laws and the rules of FINRA to the potential intermediation—including custody—of digital asset securities and transactions. At the outset, the Statement made clear that novel issues have been raised. It…