Businesses are understandably focused this week on the looming effective date for the European Union’s General Data Protection Regulation (GDPR). For U.S. businesses, however, a proposed law closer to home would raise similar compliance burdens and create potential litigation risks.
This November, voters in California will likely vote on whether to pass a ballot initiative,
As numerous states propose and enact legislation focused on blockchain technology and cryptocurrencies, in 2018, no state has been more aggressive in this space than Wyoming. In March, the state legislature passed several bills impacting cryptocurrency businesses, each of which is designed to position Wyoming as a blockchain-friendly environment for businesses.
On March 1, 2018, the one year transition period within which banks, insurance companies, and other financial services institutions and licensees regulated by the New York Department of Financial Services (“Covered Entities”) must have implemented a cybersecurity program ends. By March 1, the Covered Entities must be in compliance with the following requirements:
23 NYCRR
On February 15, 2018—that is, today—banks, insurance companies and other financial services institutions and licensees regulated by the New York Department of Financial Services (DFS) are required to file their first certification of compliance with DFS’s far reaching cybersecurity regulation (23 NYCRR Part 500) (the “Regulation”).
The Regulation, which became effective on March 1, 2017,
As previously reported, state legislatures throughout the country continue to propose legislation designed to facilitate the use of blockchain-based technology by businesses within their states. In recent weeks, legislatures in Florida and Nebraska have each proposed laws streamlining the transaction of business electronically and through use of distributed ledgers on blockchain applications. In Arizona, the
While the investment potential of cryptocurrencies, including BitCoin, has been all over the news in recent weeks, state governments have begun to explore the practical applications of blockchain – the technology underlying BitCoin. In New York, Assemblyman Clyde Vanel introduced four bills in late November related to blockchain technology. The first, Assembly Bill 8780, would amend the state technology law to allow signatures, records and contracts secured through blockchain technology to be considered valid electronic records and signatures and further to recognize the legal validity of the use of smart contracts in commerce. This proposed legislation, recognizing legal effect to blockchain transactions and smart contracts, is similar to laws recently passed in other states, including Arizona, Nevada and Vermont.
Continue Reading Proposed Legislation in New York Would Recognize Enforceability of BlockChain Transactions and Explore Applications of Technology
In its first lawsuit targeting Initial Coin Offerings (ICOs), the Securities and Exchange Commission (SEC) has filed fraud charges against the creator of the ICOs marketed as “REcoin” and “DRC.” The action, filed in the United States District Court for the Eastern District of New York on September 29, 2017, alleges that Maksim Zaslavskiy, operating through two wholly owned companies, raised over $300,000 from investors based on false claims the digital “tokens” or “coins” being marketed were backed by investments in either real estate or diamonds. According to the SEC’s Complaint, not only were funds raised by the ICO not invested in any assets, the digital tokens did not actually exist. Despite representations by Zaslavskiy, no digital tokens and actually been developed or issued on a blockchain, leaving investors with no value in exchange for their payments.
Continue Reading SEC Brings Fraud Action Against ICO Creator
This month a new law governing virtual currency and online transactions went into effect in Alabama. The Alabama Monetary Transmission Act was passed by the legislature in May and replaces the “Sale of Checks Act” which had been in effect since 1961. The legislation regulates transactions involving virtual currency, such as BitCoin, as well as
In the latest example of security risks attendant to initial coin offerings (ICOs), on August 21st the blockchain startup Enigma reported that online scammers used fake solicitations for an ICO presale to steal approximately $500,000 in ether (a virtual currency) from investors.
Enigma is a blockchain startup incubated at MIT Media Lab that is in the process of rolling out its first product, known as Catalyst. Catalyst is described as a platform providing data sets and developmental tools specifically geared for hedge funds focused on cryptocurrency markets. Enigma’s funding was to be derived, in part, from a planned a token sale on September 11, 2017, with a goal of raising $20 million worth of ether.
Continue Reading Scammers Strike Enigma Initial Coin Offering
The Uniform Law Commission is set to vote on a draft Uniform Regulation of Virtual Currency Businesses Act at its upcoming annual meeting in San Diego beginning on July 14th. As numerous states and federal regulators have already begun the process of regulating virtual currencies through “money transmitter” statutes or related legislation, the uniform act attempts to establish model standards for the regulation of business activities tailored to virtual currencies.
Specifically, the uniform act would regulate businesses whose products and services include: (1) the exchange of virtual currencies for cash, bank deposits, or other virtual currencies; (2) the transfer from one customer to another of virtual currencies; or (3) certain custodial or fiduciary services in which the property or assets being controlled or managed include virtual currency. The act includes several exemptions from regulation for banks, securities brokers, personal or household purchases, blockchain data miners and others.
Continue Reading Primer on the Draft Uniform Regulation of Virtual Currency Businesses Act