The Federal Deposit Insurance Act (FDIA) generally prohibits insured state banks, but not uninsured state member banks, from acting as principal in activities that are not permissible for national banks. Relying on its authority under the FDIA to limit the activities of state member banks, on January 27, 2023, the Federal Reserve Board (Fed) issued
Throughout the latter half of 2022, filing for bankruptcy became a reality for many high-profile crypto firms. The resurgence of “crypto winter” has brought many crypto-related entities to their proverbial knees. Indeed, in November 2021, the total cryptocurrency market capitalization reached an all-time high of approximately $3 trillion. That figure has decreased substantially, and today
On December 21, 2022, outgoing Senator Pat Toomey (R-PA) introduced legislation entitled the Stablecoin TRUST Act of 2022 that would establish the first-ever federal regulatory framework for payment stablecoins. In the press release announcing the proposed legislation, Senator Toomey stated that he “put forward a regulatory model that won’t undermine competition by favoring entrenched incumbents
On January 3, The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the Agencies) issued a joint statement to banking organizations highlighting a number of risks associated with crypto-assets.
While the Agencies expressly state that “banking organizations are neither prohibited nor
On December 14, Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) introduced the Digital Asset Anti-Money Laundering Act of 2022 (the Act) that would extend anti-money laundering and countering of the financing of terrorism requirements to cryptocurrency and digital assets. The bill follows warnings from the Treasury Department, Department of Justice, and national security and
The Consumer Financial Protection Bureau (CFPB) issued a decision denying Nexo Financial, LLC’s petition to modify a civil investigation demand (CID) originally served on the company on December 1, 2021. At that time, Nexo Financial and its affiliates advertised a range of products, including interest-accruing accounts and lines of credit. In its petition, Nexo Financial
On November 30, Senate Banking Committee Chairman Sherrod Brown (D-OH) sent a letter to Treasury Secretary Janet Yellen requesting that she coordinate with other financial regulators to further work on the recommendations from the Financial Stability Oversight Council Report on Digital Asset Financial Stability Risks and Regulation (FSOC report), which we previously discussed here.
On November 28, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $362,158.70 settlement with Payward, Inc. d/b/a Kraken. The Delaware-incorporated virtual currency exchange allegedly processed 826 transactions amounting to approximately $1.7 million on behalf of individuals located in Iran. In addition to the fine, Kraken also has agreed to
On November 10, the Consumer Financial Protection Bureau (CFPB) released a new complaint bulletin, highlighting consumer complaints it has received related to crypto-assets. The bulletin suggests that fraud, theft, hacks, and scams pose a significant problem in crypto-asset markets. Also, according to the bulletin, consumers reported issues with executing transactions and transferring assets between
Missouri recently modernized its money laundering statute to define cryptocurrency and to include cryptocurrency within its definition of “monetary instruments.” This is a significant step for Missouri as it eliminates what was once a safe harbor, by clarifying any underlying confusion and permitting state prosecutors to pursue previously elusive criminal activity.
Missouri amended its money