The current state of blockchain innovation in the United States is a tale of two asset classes. On one hand, the Securities and Exchange Commission’s reluctance to embrace or endorse blockchain-based securities has ground the innovation in that sector to a crawl. On the other hand, regulators in the banking, money transmission and commodities spaces have demonstrated a willingness to work with blockchain companies to permit the offering of assets and asset classes in those spaces. As a result, non-securities blockchain-based assets and businesses have proliferated in recent years.
Years after the initial coin offering craze, the SEC and the Financial Industry Regulatory Authority, or FINRA, continue to be reluctant to embrace these asset classes. FINRA has approved only a few of the many crypto broker-dealer applications it has received. Despite retail demand and myriad bids, the SEC has yet to approve a exchange-traded fund, citing concerns about market manipulation while sustaining enforcement efforts to enjoin the distribution of tokens it considers securities, including in the Telegram and Kik cases.
Margo Tank of DLA Piper focuses her practice on advising commercial enterprises and technology companies on the full spectrum of regulatory compliance matters related to money transmission, digital currencies, emerging payment mechanisms, and the use of electronic signatures and records to enable digital transactions. An early advocate for the financial services industry’s acceptance and implementation of electronic signatures, she served as counsel to the Electronic Financial Services Council and assisted the group draft and advocate for the Electronic Signature in Global and National Commerce Act (ESIGN Act) and is currently counsel to the Electronic Signatures and Records Association.
Michael Fluhr of DLA Piper counsels and defends companies in a wide variety of complex, commercial disputes. Michael focuses his practice on the financial sector, including the blockchain and digital asset space, where he advises and defends exchanges, issuers and related companies. Sought-after for his deep understanding of the space and technology, Michael has been quoted in media and regularly publishes and speaks about issues germane to blockchain and digital assets.
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