US Senators Introduce Comprehensive Stablecoin Bill

The bipartisan bill seeks to foster innovation and promote US dollar dominance while protecting consumers and mitigating illicit finance risks. By Jenny Cieplak, Arthur Long, Yvette D. Valdez, Stephen P. Wink, Adam Fovent, and Deric Behar On April 17, 2024, US Senators Cynthia Lummis from the Senate Banking Committee and Kirsten Gillibrand from the Senate Agriculture Committee introduced proposed legislation to create a US regulatory framework for stablecoins. The bipartisan Lummis-Gillibrand Payment Stablecoin Act (the…

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Can It Be a Commodity if It’s Not Fungible?

Understanding NFTs as commodities calls for a more nuanced analysis than what their “non-fungible” label might suggest at first glance. By Yvette D. Valdez The appropriate regulatory characterization of cryptocurrencies and digital assets for US legal purposes has spawned many pages of analysis and occupied many hours of industry, law firm, and regulatory consideration. Significant amounts of commentary, and later government and judicial attention, have been devoted to determining whether fungible…

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The SEC’s Definition of a “Dealer”

The SEC’s ambiguous rule could have a chilling effect both on decentralized finance and on the provision of liquidity to centralized crypto exchanges. By Jenny Cieplak, Marlon Q. Paz, Stephen P. Wink, and Naim Culhaci The Securities and Exchange Commission (SEC) adopted a new rule on February 6, 2024, further defining the phrase “as part of a regular business” — which is an integral part of what it means to be a “dealer” under securities laws.…

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California Adopts Digital Financial Assets Law

Licensees, exchanges, and other market participants should prepare to comply with the listing, disclosure, capital, and other requirements that the new law imposes. By Jenny Cieplak, Nima Mohebbi, Parag Patel, Stephen P. Wink, Ian Irlander, Adam Zuckerman, Luca Marquard, and Deric Behar On October 13, 2023, California Governor Gavin Newsom signed California State Assembly Bill 39, which establishes the Digital Financial Assets Law (DFAL). The new law, which goes into…

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SEC Continues Enforcing Against NFT Projects

Cyprus CEO summary: On September 13, 2023, the US Securities and Exchange Commission (SEC) issued a cease-and-desist order against Stoner Cats 2, LLC (SC2) for allegedly conducting an unregistered securities offering through the sale of non-fungible tokens (NFTs) valued at $8.2 million. The NFTs were linked to a web-based animated series, and NFT holders received exclusive access to episodes and other benefits. The SEC considered these NFTs as investment contracts,…

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FCA Board Focuses on AI

The UK’s Financial Conduct Authority (FCA) has published its latest board minutes highlighting its increasing focus on artificial intelligence (AI), in which it “raised the question of how one could ‘foresee harm’ (under the new Consumer Duty), and also give customers appropriate disclosure, in the context of the operation of AI”. This publication indicates that AI continues to be a key area of attention within the FCA. It also demonstrates…

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