by Arthur Long and Jeffrey Steiner
On October 15, 2021, the Commodity Futures Trading Commission (CFTC) issued an enforcement order (Tether Order) against the issuers of the U.S. dollar Tether token (USDT), a leading stablecoin, and fined those issuers $41 million for making untrue or misleading statements about maintaining sufficient fiat currency reserves to back each USDT “one-to-one.”[1] In so doing, the CFTC asserted that USDT is a “commodity” under the Commodity Exchange Act (CEA).
by Arthur S. Long and Samantha J. Ostrom
This week, there were important virtual currency developments at two of the principal federal banking agencies, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Both of these developments occurred as the markets for digital currencies showed substantial volatility. First, in testimony before Congress on Wednesday, Acting Comptroller of the Currency Michael Hsu expressed concerns about the OCC’s recent actions for digital currency companies and stated that he had “asked staff to review these actions.”[1] Second, the FDIC published a request for information (RFI) about digital assets and the banking system.[2] Comments on the RFI are due by July 16, 2021. Continue reading
by Arthur S. Long and Elizabeth A. Ising
On February 26, 2021, the Board of Governors of the Federal Reserve System (Federal Reserve) issued a Supervision and Regulation letter[1] containing its final supervisory guidance (Effectiveness Guidance) on the effectiveness of a banking institution’s board of directors. The Guidance applies to bank holding companies and savings-and-loan holding companies with total consolidated assets of $100 billion or more, with the exception of intermediate holding companies of foreign banking organizations (IHCs). A separate Supervision and Regulation letter issued the same day revised twelve prior Supervision and Regulation letters touching on the subject and made nine additional prior Supervision and Regulation letters inactive.[2] Continue reading
by Arthur S. Long and Samantha J. Ostrom
On November 20, 2020, the Office of the Comptroller of the Currency (“OCC”) proposed a rule to require large national banks and federal savings associations to offer and provide “fair access” to financial services (Fair Access Proposal).[1] The Fair Access Proposal can be seen as a potential preemptive strike against regulatory encouragement of moves to “debank” certain bank customers, such as the fossil fuel industry and agribusiness. This post contains a summary of the Fair Access Proposal, the OCC’s justifications for it, and the OCC’s asserted legal authority for promulgating it. The deadline for comments on the Fair Access Proposal is January 4, 2021 – suggesting that the OCC may be seeking to finalize it before a new Comptroller of the Currency is appointed and confirmed. Continue reading
by Mylan L. Denerstein, Matthew L. Biben, James L. Hallowell, Mitchell A. Karlan, Arthur S. Long, and Emil N. Nachman
On March 21, 2020, New York Governor Andrew Cuomo issued an Executive Order relating to 90-day forbearances for borrowers that are suffering financial hardship as a result of the COVID-19 pandemic. In part, this Executive Order called on the New York Department of Financial Services (DFS) to promulgate emergency regulations in furtherance of the Governor’s directive. On March 24, 2020, the New York Superintendent of Financial Services, Linda A. Lacewell, promulgated regulations implementing the Executive Order (Emergency Regulations). Importantly, the Emergency Regulations clarify ambiguities in the Executive Order and demonstrate a focus on consumer and individual forbearances. Continue reading
by Arthur S. Long, Carl E. Kennedy, and Jeffrey L. Steiner
This post reviews the New York State Office of the Attorney General’s (the “OAG”) Virtual Markets Integrity Initiative Report (the “Report”), which was published on September 18, 2018.[1] The publication of the OAG’s 42-page Report brings to a close its six-month fact-finding inquiry of several virtual currency platforms.[2] The OAG sent out detailed letters and questionnaires to a number of virtual currency platforms seeking information from the platforms across a wide-range of issues, including trading operations, fees charged to customers, the existence of robust policies and procedures, and the use of risk controls. Continue reading