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Archive: July 2022

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Upper Tribunal considers the application of the MLRs to a cryptoasset exchange provider and comments on FCA procedures

July 28, 2022

The business of Vladimir Consulting Limited (VCL) involved trading in cryptocurrency such as bitcoin on peer-to-peer exchanges which provide a market place for sellers and buyers of cryptocurrency. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) were amended with effect from 10 January 2020 to require cryptoasset exchange providers such as VCL to be registered with the FCA. VCL applied to the FCA in September 2020 and moved into a temporary registration regime pending the determination of its application.

HM Treasury consultation and call for evidence on payments regulation and the systemic perimeter

July 26, 2022

On 21 July 2022, HM Treasury issued a consultation and call for evidence to explore reforms to the systemic payments perimeter under the supervision of the Bank of England (BoE). It sets out why now is the time to review the applicability of the BoE’s existing regulatory perimeter over payment systems, the Government’s principles in approaching any reforms, and potential adjustments to the framework of the Banking Act 2009.

FCA updated webpage: Transforming data collection

July 26, 2022

On 22 July 2022, the FCA updated their website on transforming data collection.

Partnering in the Fight Against Financial Crime: Data Protection, Technology and Private Sector Information Sharing

July 26, 2022

On 20 July 2022, the Financial Action Task Force (FATF) issued a report intended to help jurisdictions enhance, design and implement information collaboration initiatives among private sector entities in accordance with data protection and privacy (DPP) rules so that the risks associated with increased sharing of personal data are appropriately taken into account. The report provides case studies that set out how members of the FATF and its Global Network have increased private sector information sharing within the legal requirements of their domestic DPP framework. Their experiences indicate that private sector information sharing measures can be achieved in compliance with DPP rules and obligations, subject to key tests and requirements. The report provides non-binding recommendations to assist countries that are considering increasing private sector information sharing to design and implement such initiatives responsibly and effectively.

Regulation by enforcement takes center stage again for the US SEC

July 26, 2022

On Thursday, July 21, 2022, the US Attorney's Office for the Southern District of New York charged a former cryptocurrency exchange (the Exchange) product manager for allegedly tipping off his brother and friend with material, non-public information in advance of the Exchange's listing announcements of certain digital assets (see our analysis of the indictment). The same day, the Securities and Exchange Commission (the SEC) also decided to throw its hat in the ring in another stark example of the SEC's "regulation by enforcement."

SDNY and SEC bring first cryptocurrency insider trading case

July 26, 2022

In the midst of the "crypto winter," cryptocurrency enforcement activity is heating up. On July 21, 2022 the US Attorney's Office for the Southern District of New York (SDNY) and Securities and Exchange Commission (SEC) brought the first insider trading case involving cryptocurrency against a former cryptocurrency exchange employee and his brother and friend, following last month's first ever indictment for insider trading involving non-fungible tokens. In a prior New York Law Journal article, we discussed the mounting prevalence of frauds and other crimes utilizing cryptocurrency, how these crimes often resemble conventional crimes with which the public is all too familiar, and enforcement agencies' response: funneling resources to the cryptocurrency space to address such crimes. These insider trading charges are the latest example of traditional crimes being committed through cryptocurrencies and, given the continued direction of enforcement efforts towards the cryptocurrency space, they are unlikely to be the last.

Decoding DeFi regulation: Challenges and opportunities

July 26, 2022

Technological innovation has continued unabated over the course of the past few years, and financial services has fared no differently. Replicating the core Web3 principle of shifting control and ownership away from a centralised operator, decentralised finance (DeFi) has created a new model for financial services that threatens to disrupt the existing order. In this article, we will explore the core characteristics of DeFi: how it works; what the key use cases are; and what regulatory challenges it creates.

Dealing with a crypto winter in the heat of the summer: a US perspective

July 20, 2022

At a time when cryptocurrencies have experienced several weeks of tumult, losses in value and in some cases collapses and liquidation, what should participants in the cryptocurrency and DeFi space be doing? If a “crypto winter is coming,” should participants be getting ready for winter? Is it a viable approach to sit tight, for now, to “wait and see,” predicting or hoping that they will not be at the center of future storms?

European Parliament draft report on the proposed Directive on consumer credits

July 20, 2022

On 12 July 2022, the European Parliament published compromise amendments on the draft report on the Proposal for a Directive of the European Parliament and of the Council on consumer credits. Overall, MEPs want better protection for consumers applying for loans online. The new EU rules aim at protecting consumers online from credit card debt, overdrafts and loans that are unsuitable for their financial situation. MEPs also introduced further requirements to assess the creditworthiness of people taking out a loan before it is granted. There should be clear consumer information and consumers should always obtain standard information so they can compare different offers, and understand the legal and financial consequences of loans and credit costs. MEPs would also like to increase the level of consumer protection and avoid over-indebtedness.

Norton Rose Fulbright advises OKX on market entry into Dubai

July 20, 2022

Global law firm Norton Rose Fulbright's Dubai office has advised cryptocurrency exchange OKX on its entry into the UAE market.