State of Regulatory Affairs.

Transcription

1 State of Regulatory Affairs

2 Thank You Webinar Sponsor Manatt, Phelps, and Phillips

3 Speakers Host John Beccia Circle General Counsel Jeffrey Alberts Pryor Cashman LLP Partner Perianne Boring Chamber of Digital Commerce Founder and President Carol Van Cleef Manatt, Phelps & Phillips Partner Megan Burton CoinX CEO

4 Agenda California Department of Business Oversight (DBO) decision to regulate digital currencies New York Department of Financial Services (DFS) updated BitLicense proposal Conference of State Bank Supervisors (CSBS) draft model framework for virtual currency activities IRS public request for comment Prison sentence delivered to Charlie Shrem Recent FinCEN Actions Upcoming events

5 California to Regulate Digital Currency Dec. 4, 2014 California s Business Oversight Department has determined that a state law governing money transmitters, used to regulate businesses such as Western Union Co., may also apply to digital currencies. Consumers would be the prime concern of any regulatory structure we build. -Tom Dresslar, DBO Jan. 5, 2015 California Delays Formal Decision on Bitcoin Regulation

6 New York DFS BitLicense Proposal Timeline: July 17, 2014: BitLicense Proposed (with 45 day comment period) August 21, 2014: Comment Period Extended An Extra 45 Days October 21, 2014: Comment Period Closed (over 3,000 comments filed)? : BitLicense Updated Proposal Released

7 New York DFS BitLicense Proposal 12/18/2014: Superintendent Benjamin Lawsky announced latest revisions to draft proposal, incorporating changes from public comment Allows for 2 year start up/transitional period for compliance Reduced record-keeping requirements Allows virtual currencies to count toward licensees capital requirements Not required to apply: - Personal investors, - Virtual currency accepting merchants and their customers, - Software developers, miners, - Issuers of loyalty/rewards programs denominated in fiat currency

8 Conference of State Bank Supervisors On December 16, 2014 the CSBS s Emerging Payments Task Force: 1. Proposed State Regulatory Requirements for Virtual Currency Activities, 2. Drafted Model Regulatory Framework, 3. Requested Public Comment

9 CSBS Policy Statement for Virtual Currency Activities CSBS recommends that activities involving third party control of virtual currency, including for the purposes of transmitting, exchanging, holding, or otherwise controlling virtual currency, should be subject to state licensure and supervision. Covered Activities for licensing and supervision requirements: Transmitting Exchanging (including virtual currency for virtual currency) Services that facilitate the third-party exchange, storage, and/ or transmission of virtual currency (e.g. wallets, vaults, kiosks, merchant-acquires, and payment processors) However, a cryptography-based distributed ledger system for non-financial recordkeeping would be outside the scope of this policy.

10 CSBS Request For Comment Comments due February 16, 2015 All comments will be made public To submit comments visit:

11 IRS Request for Comments Dec. 29, 2014 Internal Revenue Bulletin No : D. Request for Comments on the Treatment of Virtual Currency The Treasury Department and the IRS are considering the proper treatment of virtual currency under section 6038D and welcome comments on this topic. Sec. 6038D: To submit comment visit:

12 Charlie Shrem Sentencing 12/20/2014: Former Bitcoin Foundation board member and BitInstant CEO sentenced to two years jail time and three years supervised release Shrem was originally charged with participating in a money laundering conspiracy AND operating an unlicensed money transmission business even though his company, BitInstant, was resisted with FinCEN as an MSB. Pled guilty to aiding and abetting his partners company, Mr. Fiella.

13 Recent FinCEN Actions Former MoneyGram, Chief Compliance Office, Tom Haider fined $1 million nearly 6 years after leaving the company Liberty Reserve CTO, Mark Marmilev, sentenced to 5 years in prison North Dade Credit Union receives $300,000 BSA fine

14 Upcoming Events Jan. 13: US Treasury Roundtable Discussion on Financial Access Please fill out our survey: Jan : Anti-Money Laundering Compliance Bootcamp for Digital Currency, Miami Jan : The North American Bitcoin Conference, Miami

15 Anti-Money Laundering Compliance Bootcamp for Digital Currency Miami Beach January 15-16, 2015 in conjunction with The North American Bitcoin Conference 10% Discount for Webinar Attendees Enter Code WEBINAR Register at Sponsored by Confidential - Not for Distribution

16 Q&A Contact: