Welcome to Shearman & Sterling’s FinTech Insights, where we provide you with real time insight and key trends on the technological revolution that is transforming the financial services industry. Here you can find relevant information on the latest surrounding the regulatory framework, digital banking, blockchain, distributed ledger, cryptocurrencies, ICO’s and much more.
New AML Recommendations for Virtual Assets
10/25/2018Citing an “urgent need” to step up global efforts to prevent the use of virtual assets for crime and terrorism, the Financial Action Task Force (FATF) updated its recommendations for the regulation of virtual assets. Among other things, the FATF recommended broader definitions of “virtual assets” and “virtual asset service providers” to include exchanges, wallet providers and certain initial coin offering service providers.
The FATF is an inter-governmental policy-making body responsible for promoting the implementation of legal, regulatory and operational anti-money laundering (AML) and combatting the financing of terrorism (CFT) standards. Its recommendations are not binding law, but rather a set of standards intended for member nations to incorporate within their rulemakings. FATF President Marshall Billingslea has said that the organization also plans to issue AML/CFT rule recommendations in respect of virtual assets and clarify how the FATF expects such rules to be enforced by June 2019. Additionally, the FATF plans to review the scope of activities covered under its amended recommendations and glossary within the next 12 months and consider whether further updates are necessary.
FINRA Requests that Firms Disclose Digital Asset Activity
07/24/2018Earlier this month, the Financial Industry Regulatory Authority called on its members to notify FINRA if they, or any associated persons or affiliates, engage, or plan to engage, in any activities related to digital assets. In the notice to members, FINRA also asked firms to inform their regulatory coordinators up until July 31, 2019, if they, or any associated persons or affiliates, begin to engage in activities related to digital assets that have not been previously disclosed.
Gemini Co-Founders Cameron and Tyler Winklevoss Propose Virtual Commodity Self-Regulatory Organization
03/13/2018On March 13, 2018, virtual currency exchange Gemini released a proposal to create the first SRO for U.S. virtual commodity exchanges. The so-called Virtual Commodity Association (VCA), as envisioned, would be a non-profit, independent regulatory organization that would operate to foster responsible virtual commodity markets by requiring members to implement specified sound practices and supervising members’ implementation of such practices. The VCA would also encourage greater cooperation with relevant regulators in an effort to assist with the maturation of the virtual commodity industry.