The first states to officially begin regulating blockchain technology and business did so in 2014, when a guidance document from the Texas Department of Banking excluding blockchain activity from the state’s money transmitter laws kicked off a chain of similar opinions in other jurisdictions. Since then, at least 26 states—ranging from Alaska to West Virginia—have either introduced or enacted legislation regulating blockchain in some manner. The past seven months have seen the marked growth of legislative activity in the blockchain space, and at least sixteen bills have been enacted or proposed so far this year.
 Texas Department of Banking, Supervisory Memorandum 1037, Regulatory Treatment of Virtual Currencies Under the Texas Money Services Act (April 3, 2014), available at http://www.dob.texas.gov/public/uploads/files/consumer-information/sm1037.pdf.
Lost in the headlines over the SEC’s recent pronouncements on cryptocurrency was important practical advice for both promoters of and participants in initial coin offerings (ICOs). Read More ›
FinCEN Cracks-Down on Yet Another Alleged Illegitimate Virtual Currency Exchange, Raising More Concerns for Legitimate Exchanges
The Financial Crimes Enforcement Network (FinCEN) takes first action against a foreign-located money service business
Yesterday’s flurry of releases from the U.S. Securities and Exchange Commission leaves open the question of whether any individual initial coin offering (ICO) represents the sale of securities under applicable U.S. law. Read More ›
This article was originally published on July 7, 2017 in Bitcoin Magazine, a subsidiary of BTC Media, LLC.
Initial Coin Offerings (ICOs) are where cryptographic computing and federal securities laws collide. As investors lacking the technical expertise of early market entrants throw their money into cryptocurrency presales, regulatory agencies like the U.S. Securities and Exchange Commission cannot be expected to sit on the sidelines much longer. Read More ›
West Virginia Governor Jim Justice has signed two bills (SB 344 and SB 563) into law that make significant changes to the West Virginia Consumer Credit and Protection Act, (“WVCCPA”). Both bills will go into effect on July 4, 2017. Read More ›
On Wednesday, April 26, the Conference of State Bank Supervisors (the “CSBS”) filed suit against the Office of the Comptroller and Currency and its Comptroller Thomas J. Curry (collectively, the OCC”) over Curry’s December 2016 announcement that the OCC has created a new national bank charter for non-bank companies (the “Non-Bank Charter Rule”). This Non-Bank Charter Rule, the complaint alleges, will pull chartered non-bank companies into the national banking regulatory system, and will preempt and replace state-based banking regulation, licensing, and supervisory responsibility of state authorities. Read More ›
Prepaid cards are increasingly popular—they are frequently used instead of traditional bank accounts to shop, withdraw cash from ATMs, pay for healthcare costs from health savings accounts, distribute natural disaster aid, and pay wages. Read More ›
A Cautionary Tale for Money Service Businesses: How Violating the Bank Secrecy Act Could Cost Millions
On February 27, 2017, The Financial Crimes Enforcement Network (“FinCEN”) fined Merchants Bank of California (“Merchants”) $7 million for what it called “egregious” violations of the Bank Secrecy Act (“BSA”). The Office of the Comptroller of the Currency simultaneously assessed a $1 million civil monetary penalty against Merchants because it violated two previous consent orders. Merchants is a community bank located in Carson City, California. The Bank had a large portfolio of Money Service Businesses (“MSBs”) customers. MSBs are generally recognized by federal regulators to include: (1) currency dealers or exchangers; (2) check cashers; (3) issuers of traveler’s checks, money orders, or stored value; (4) sellers or redeemers of traveler’s checks, money orders, or stored value; and (5) money transmitters. In Merchants’ case, it had 165 check-cashing and 44 money-transmitter customers, who often operated at great distances from the Bank. Compounding the situation was the fact that Bank insiders owned or managed a number of the MSB customers. Read More ›
New Hampshire legislators may exempt people who provide money transfer services for virtual currency, such as bitcoin, from being considered “money transmitters” for the purposes of the state’s licensing requirements. Specifically, the bill, HB436, would amend the definitions section (RSA 399-G:1) and the exemptions (RSA 399-G:3). As modified, the definitions would clearly define what a “virtual currency” is. The amended version would also create a new licensing exemption for “[p]ersons conducting business using transactions conducted in whole or in part in virtual currency.” Read More ›
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Courtney Rogers Perrin practices in the Nashville office as a member of the Firm’s Electronic Payments and Blockchain practice groups. She assists clients with regulatory compliance, contract negotiations, acquisitions and fund formation relating to credit card processing and fintech enterprises, including smart contracts and virtual currency matters.