Welcome to Shearman & Sterling’s FinTech Blog, where we provide you with insight on key trends in the FinTech ecosystem. Here you can find relevant information with the latest on digital banking, FinTech regulation, digital assets, blockchain, AI, and more.
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Distilling U.S. Regulatory Environment and Market Access Considerations for Growing FinTechs
10/22/2019The rise of global FinTech has brought markets together and enabled cross-border business formation and innovation, but local regulations still prevail worldwide. The United States, with its developed capital markets, solid investor base and deep pool of talent within the finance and technology sectors, is a desirable location for FinTech businesses to expand or launch operations. But it’s also home to one of the most complex and sophisticated regulatory regimes in the world.
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Shearman & Sterling’s Fintech Foundry, this week, launched Entering the U.S. Market: A Guide for Fintech Firms, a demystifying overview of the issues, regulations and resources that FinTechs from the United Kingdom and around the world will want to be aware of before they expand into the U.S. -
Court Rejects CSBS Suit Over OCC FinTech Charter
09/09/2019Last week, Judge Dabney Friedrich of the U.S. District Court for the District of Columbia dismissed a lawsuit brought by the Conference of State Bank Supervisors (CSBS) that would have prevented the Office of the Comptroller of the Currency (OCC) from offering a special purpose national bank charter (or “FinTech charter”) to certain non-bank financial services firms. The CSBS brought the lawsuit in October 2018 following the OCC’s July 2018 announcement that it would begin accepting applications for the FinTech charter, arguing that the OCC lacks the authority to award bank charters to non-depository institutions. However, Judge Friedrich concluded that the CSBS did not have standing to bring the suit given the fact that the OCC has yet to award a FinTech charter to any non-bank financial services firms.
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Financial Services Regulation for FinTech Companies
06/19/2019Partner Nathan Greene and Associate Justin Reda (both New York-Investment Funds) have published a two-part article in Law360 titled "Financial Services Regulation For FinTech Companies." Part 1 of the article uses relevant case studies to examine the ways that FinTech entrepreneurs can best anticipate and navigate financial services regulations, and Part 2 of the article focuses on the regulatory environment in the financial services sector and reviews key regulations surrounding various types of financial and investment products and services.
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Shearman & Sterling Launches FinTech Regulatory Sandbox Map Update
05/17/2019Shearman & Sterling’s FinTech Foundry last week updated its FinTech regulatory sandbox map, which provides an interactive look at the over 40 FinTech regulatory sandboxes located throughout the world. The updated map accounts for the launch of four new FinTech regulatory sandboxes, including those in Kenya, South Korea, the United Kingdom (Information Commissioner's Office) and the United States (Utah).
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Reena Agrawal Sahni Authors Chapter on U.S. FinTech Regulatory Environment
05/16/2019Partner Reena Agrawal Sahni (New York – FIA & FR) and Associate Eli Kozminsky (New York – FIA & FR) recently authored a chapter in the International Comparative Legal Guide to: FinTech 2019 on the FinTech regulatory environment in the United States. Among other topics, the chapter covers the U.S. FinTech landscape generally, the types of funding available to FinTech firms and the various state and federal regulatory regimes in the United States applicable to FinTech activities.
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New York Office of the Attorney General Accuses Crypto Exchange of Covering Up $850 Million Loss
05/07/2019The New York State Office of the Attorney General (OAG) recently sanctioned iFinex Inc., the operator of the virtual currency exchange Bitfinex, and Tether Limited, issuer of the “tether” token, and their related entities in connection with findings from an OAG investigation into the entities. The court order requires that the operators of the companies immediately cease further dissipation of the U.S. dollar assets which back “tether” tokens while OAG’s investigation continues, and produce requested documents and information.
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Shearman & Sterling Launches Interactive FinTech Regulatory Sandbox Survey
03/28/2019Through our FinTech Foundry, Shearman & Sterling today has launched an interactive survey of the FinTech regulatory sandboxes located throughout the world. Each point on the map indicates the existence of a regulatory sandbox and a user may click to get further information such as launch date, governing commission, law & regulations and sandbox environment.
Regulatory sandboxes provide a controlled environment for eligible FinTech firms to conduct live testing in under regulatory supervision. The number of regulatory sandboxes worldwide has grown significantly over the past two years, as now over 30 countries and jurisdictions have launched sandbox initiatives, with several others set to follow suit.
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ABA White Paper Offers Roundup of Global Digital Asset Regulations
03/22/2019Last week, the American Bar Association (ABA) published a white paper surveying the regulation of digital assets in a number of global jurisdictions. The most space is devoted to how digital assets fit in U.S. regulatory frameworks under the jurisdiction of certain federal regulators, including the Commodity Futures Trading Commission, Securities and Exchange Commission and the Treasury Department’s Financial Crimes Enforcement Network. The paper also details certain U.S. state legislation, such as New York’s BitLicense, and surveys digital asset regulatory environments in all 50 states. The paper also explores how digital assets fit in international regulatory frameworks, including those in the EU, the U.K., Switzerland, Japan, South Korea, Australia and China, among several others. It highlights guidance from international standard-setting bodies as well, such as the International Organization of Securities Commissions, the Group of Twenty Nations and the Financial Stability Board.
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Conference of State Bank Supervisors Endorses FinTech Recommendations
02/21/2019Last week, the Conference of State Bank Supervisors (CSBS), the nationwide organization of financial regulators from all fifty U.S. states, the District of Columbia, Guam, Puerto Rico, American Samoa, and the U.S. Virgin Islands, released a series of action items to implement recommendations received from the CSBS Fintech Industry Advisory Panel. The panel was established in 2017 to help streamline multistate regulation of FinTech businesses and other nonbanks, and comprises thirty-three companies, including FinTech firms like SoFi, Ripple, and Circle. The panel also contains two subgroups: one focused on the lending industry; and the other focused on the payments industry.
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NASAA Cracks Down on Fraudulent ICOs and Enters into Information Sharing Agreement with the CFTC
5/30/2018At the North American Securities Administrators Association Conference on May 21, 2018, NASAA, an association of state and provincial securities administrators in the United States, Canada and Mexico, announced a joint effort among its members to halt fraudulent initial coin offerings and virtual currency-related investment products. The so-called “Operation Cryptosweep,” which was launched this past April, consists of NASAA members from 44 jurisdictions in the United States and Canada and has to this point led to nearly 70 inquiries and 35 pending and completed enforcement actions, with more expected in the coming months.
Read MoreCATEGORIES: CFTC, Cryptocurrencies/Virtual Currencies, Enforcement, ICOs, SEC, State Regulation, US Federal Regulation -
NY Attorney General Announces Cryptocurrency Exchange Inquiry
04/17/2018New York Attorney General Eric T. Schneiderman sent letters to thirteen cryptocurrency exchanges requesting certain key information on their operations, fee structures, internal controls, and customer safeguards. The letters also signaled the launch of the Attorney General’s broader “Virtual Markets Integrity Initiative.”
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Wyoming State Legislature Passes Several Measures to Foster Virtual Currency and Blockchain Innovation
03/06/2018The Wyoming state legislature recently passed the following virtual currency- and blockchain-focused bills intended to ease regulatory burdens at the state level for blockchain and digital asset ventures.
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Cryptocurrencies: A Big Week for U.S. Regulatory Attention
01/25/2018Jay Baris and Nathan Greene, partners in the Investment Funds group, authored an article entitled “Cryptocurrencies: A Big Week for U.S. Regulatory Attention,” summarizing a seemingly sudden burst of regulatory actions taken by the U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading Commission and a state regulator over the span of just a few days in January.
Read MoreCATEGORIES: CFTC, Cryptocurrencies/Virtual Currencies, Enforcement, Federal Regulation, SEC, State Regulation