Two months in and 2023 is set to be a big year for crypto enforcement. Fueled in part by the bankruptcy of FTX and other crypto-related companies in late 2022, regulators have begun to move past mainly rhetorical warnings regarding the crypto industry and to take a heavier hand. The SEC’s main claim has been for unregistered securities and exchanges,…
In a further response to the events over the past several months that have rattled the crypto industry, on February 23, 2023, the Federal Reserve Board (“FRB”), Federal Deposit Insurance Corporation (“FDIC”) and Office of the Comptroller of the Currency (“OCC”) (together the “Agencies”) issued their second joint statement (the “Statement”) in less than two months regarding crypto-asset-related risks. As…
On Monday, January 23, 2022, the New York Department of Financial Services (the “DFS”) released a letter (the “Guidance”) clarifying virtual currency custody and disclosure standards and practices that the DFS expects from entities that have received a “BitLicense” and New York limited purpose trust companies (the “VCE Custodians”). The Guidance is final and effective immediately. The Guidance complements existing…
On December 19, 2022, FTX Trading Ltd. issued a press release announcing a process for the voluntary return of avoidable pre-bankruptcy payments to “secure the prompt return of such funds to the FTX Estates for the benefit of customers and creditors.”[1] Seeking to clawback or “avoid” pre-bankruptcy transfers is commonplace in bankruptcy. Such transfers may include customer withdrawals, payments to…
In response to “significant volatility and exposure of vulnerabilities in the crypto-asset sector” throughout 2022, on January 3, 2023, the Federal Reserve Board (“FRB”), Federal Deposit Insurance Corporation (“FDIC”) and Office of the Comptroller of the Currency (“OCC”) (together the “Agencies”) released a joint statement (the “Statement”) highlighting risks to banking organizations related to crypto-assets and reiterating that banking organizations…