The New York State Department of Financial Services (DFS) is the department of the New York state government responsible for regulating financial services and products, including banking and financial services firms. On July 29, 2021 DFS Superintendent Linda A. Lacewell announced new action by DFS to promote diversity, equity and inclusion in the banking and non-depository financial industries. In the industry letter to New York-regulated banking institutions and New York-regulated non-depository financial institutions, DFS outlined its…
One of the byproducts of the initial coin offering craze was class action lawsuits that alleged that the underlying tokens were securities and that the securities law were violated because the offerings for those alleged securities did not comply with the securities laws. The US Securities and Exchange Commission continues to pursue cases for the improper sale of unregistered tokens. Not surprisingly, with the recent advent of the popularity of NFTs (non fungible tokens), a…
In February, we reported that both the U.S. Securities and Exchange Commission and the New York Attorney General had brought proceeding against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets. On May 7, 2021, the AGâs office filed a motion asking the court for a temporary restraining order, a preliminary injunction, and the appointment of a receiver to immediately block Coinseed and its CEO from…
On February 17, 2021, the U.S. Securities and Exchange Commission announced charges against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets, and its co-founder and Chief Executive Officer, Delgerdalai Davaasambuu, in connection with Coinseed’s offer and sale of digital asset securities. According to the SEC’s complaint, from at least December 2017 to May 2018, Coinseed and Davaasambuu sold digital asset securities called “CSD tokens”…
On December 29, 2020, New York State’s Department of Financial Services (DFS) granted a charter under New York Banking Law to GMO-Z.com Trust Company Inc., to operate as a limited liability trust company. With DFS approval, GMO is authorized to issue, administer, and redeem Japanese Yen and U.S. Dollar-pegged stablecoins in New York. The Japanese Yen stablecoin will be the first of its kind available to the public. New York, a leading global financial center, has had an interesting history with cryptocurrency. We…
We have previously written about New York’s BitLicense regulations, which prohibit companies from engaging in âvirtual currency business activityâ in New York, or with New York residents, without a license. Bittrex, based in the State of Washington, is one of the more established cryptocurrency exchanges. On April 10, 2019, the New York State Department of Financial Services (“DFS”) published a letter denying Bittrex’s BitLicense application. According to the DFS press release, the application was denied primarily…
In June 2015 New York leapt forward and introduced the BitLicense. The BitLicense regulations prohibit companies from engaging in âvirtual currency business activityâ in New York, or with New York residents, without a license. The idea is that the state will act as a gatekeeper for what is seen as high-risk business activity to ensure that companies dealing in virtual currency are structurally sound and have in place adequate protective measures, such as capital requirements…
Today, New York’s Attorney General launched the Virtual Markets Integrity Initiative, a fact-finding inquiry into the policies and practices of platforms used by consumers to trade cryptocurrencies. The Attorney Generalâs office sent letters to thirteen major virtual currency trading platforms requesting key information on their operations, internal controls, and safeguards to protect customer assets. The letters were sent to: (1) Coinbase, Inc. (GDAX); (2) Gemini Trust Company; (3) bitFlyer USA, Inc.; (4) iFinex Inc. (Bitfinex);…
The New York State Department of Financial Services (DFS) has issued guidance reminding all virtual currency entities licensed by New York State, including those that hold a money transmitter license, that they are required to implement measures designed to effectively detect, prevent, and respond to fraud, attempted fraud, and similar wrongdoing. In addition, DFS reminded virtual currency companies that they must be especially vigilant against efforts at market manipulation. In the guidance issued today, DFS…