Digital Assets And The Law Meet At White Collar Crime Institute

White Collar Crime Institute

As part of its Continuing Legal Education curriculum for its members, the New York City Bar Association brought together several hundred attendees for the “White Collar Crime Institute” yesterday.

Crypto and digital assets were a major focus of the agenda which included arguably the most important state regulator in digital assets – New York Department of Financial Services Superintendent Adrienne Harris – and panel participants comprising state and federal regulators as well as digital asset industry legal counsel including:

    • Paul Grewal, Chief Legal Officer, Coinbase
    • Shamiso Maswoswe, Chief of the Investor Protection Bureau for the Office of the New York State Attorney General
    • Noah Perlman, Chief Compliance Offer, Binance,
    • Alixandra Smith, Deputy Chief, Criminal Division, Eastern District of New York
    • David Miller, counsel with Greenberg Traurig (panel moderator)

Below a selection of highlights from yesterday’s event…

Adrienne Harris, Superintendent, New York Department of Financial Services (NYDFS)

On NYDFS mandate:

“I have this dual mandate of regulation supervision and also economic development. I think the thing that surprises most people is to learn that New York both has the most rigorous regulatory framework for digital assets in the country -and probably in the world. If you look at investment in the US – venture capital and private equity investment in digital assets – most happens in New York, which is 2x Silicon Valley, 8x Miami (…). So we see that transparency, that regulatory certainty really helps protects consumers, but it also draws the economic activity.”

On other enforcement entities entering NYDFS’ jurisdiction (such as NY Attorney General):

“I think about it much more cooperatively. We work a lot with Federal law enforcement or U.S. Attorney’s offices, FinCEN, OFAC and after that, you know, the Attorney General in New York has some good authorities and she brought some good cases for unlicensed entities that have not come through the front door – so that’s a very important partnership. But, you know, the thing that’s really made New York a leader is that we have this clarity and transparency around the rules until now, as the federal government goes to put a framework in place for cryptocurrencies for stablecoins, they come to us….”

“There really isn’t a bill that comes through Congress that we’re not asked to weigh in on. There are jurisdictions here in the US and internationally, that come to DFS and say, “We want to provide that same clarity – maybe we want to have that same expertise – how do you build it?” As in the UAE – three weeks ago, there was [interest] to copy and paste what we’ve done in DFS.”

“Illinois, California, UK, Singapore, -they’re all really looking at what we do in [New York State in] different jurisdictions. So I think it’s really that transparency, that clarity and certainty…. We’ve issued guidance, so as the industry rapidly changes, we’re able to put guidance around activities… “Here are our regulatory expectations around blockchain analytics around. (…) And I think it’s that knowledge of the space -we’ve now built a team of 60 people that expertise that allows us to be so nimble go and given us a leadership position.”
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Senators Lummis and Gillibrand Announce Responsible Financial Innovation Act Re-Introduction

Responsible Financial Innovation Act of 2023

At the Milken Institute’s The Future of Digital Assets Symposium yesterday, Senator Cynthia Lummis (R, WY) and Senator Kirsten Gillibrand (D, NY) made their first appearance together in the new Congress touting the re-introduction of their digital assets regulation bill, the Responsible Financial Innovation Act (RFIA), in mid-April.

Below is an edited transcript of the interview conducted on-stage by Michael Piwowar, Executive Vice President at the Milken Institute.

On the re-introduction of the Responsible Financial Innovation Act in the 118th Congress:

SENATOR LUMMIS: We’re looking at mid-April to reintroduce the bill. And the changes that we’re making would be a slimmed down, better looking [version] adjusting some of the definitions. We’ve been working with the SEC staff to address some of their concerns that there might be some unintended consequences to some of the definitions, but we’ve been meeting with them and taking care of that.

SENATOR GILLIBRAND: We’re also trying to address some of the concerns that we heard through regulators and the industry to clarify different areas. So we’re going to have an ambition to try to build out some of the regulatory framework that we left for studies in the first version.

It might also be a more thorough bill than the first version because the first version was just an introduction of what a baseline framework could look like in the industry, and how you would assess what are digital securities, what are digital commodities, and how you would regulate stablecoins. We had a lot of studies [,too].

Now, we’re going to actually try to do a deep dive on stablecoin regulations. We’re going to refine a lot about digital securities based on conversations we had with Chairman Gensler and the SEC staff. And we’re also going to even broaden out DeFi because [with] DeFi we punted it to the regulators in our first draft. Because of the climate we’re in right now, we think it would be better for us to give our best assessment of what that regulatory framework might look like, as opposed to waiting on regulators since regulators seem to have their own unique opinions. And there doesn’t seem to be any certainty with given regulators. So we thought it’d be better to maybe do our own parameters.

And so those are some of the things we’re working on now. The bill is going to be stronger. It’s also going to address some of the things that happened with FTX. So that it’s very clear if [FTX] was registered as a US company, what it would have had to do and why consumers would not have been so harmed. Continue reading “Senators Lummis and Gillibrand Announce Responsible Financial Innovation Act Re-Introduction”

The Arrest of FTX CEO Sam Bankman-Fried (Updated)

Sam Bankman-Fried

What we know about FTX CEO Sam Bankman-Fried’s (SBF’s) arrest last night in the Bahamas following the implosion and bankruptcy of the cryptocurrency exchange he founded…

the arrest

    • Royal Bahamas Police Force announced SBF’s arrest shortly after 6p local time yesterday for what it said were offenses against the United States and The Bahamas. Read it. SBF had just said earlier in the day that he didn’t think he would be arrested.
    • Bahamas Attorney General says that it will continue its own “regulatory and criminal investigations” into SBF while the U.S. pursues its criminal charges. The release is here.
    • The State District Attorney’s office in New York State announced Bankman-Fried’s arrest in a tweet saying that it will reveal an indictment this morning. See the charges below.
    • The Securities Exchange Commission quoted its top enforcement official, Gurbir Grewal, who congratulated law enforcement on SBF’s arrest and announced his agency’s intent to pursue “separate charges for violations of securities laws violations.” Read the tweet. See the charges below.
    • More from The NY Times, WSJ and a wild story from Bloomberg on lawyer complaints about an exchange between the Bahamian government and SBF.

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Staffers See Stablecoin Legislation And DCCPA in 2023

Staffers speak

A swirl of several hundred government relations executives and general counsels from crypto companies around the globe gathered at the Conrad Hotel this week for Blockchain Association’s first annual Policy Summit.

Even amidst the recent implosion of crypto exchange FTX, an agenda sprinkled with an impressive list of elected officials offered hope to a beleaguered audience that could be justified for wanting to update their LinkedIn profile in the past week.

In a panel titled, “Post Midterms Political Outlook: What’s On Deck for the Next Congress?,” Congressional staffers who drive policy discussion on Capitol Hill, provided a behind-the-scenes look at a range of blockchain-related issues facing Congress.

Participants reflected the bipartisan strategy of crypto policy in the House and Senate today with two Democratic and two Republican staffers – who stressed they spoke for themselves and not Members of Congress:

    • Francesco Castella, Senior Policy Advisor for Congressman Ted Budd (R, NC). Rep. Budd, a member of the House Financial Services Committee and the Blockchain Caucus, will be moving to the Senate in the next Congress. Mr. Castella appeared at DeFiCon ( in August in New York City.
    • Rashan A. Colbert, Legislative Assistant for Senator Cory Booker (D, NJ). Sen. Booker, who sits on the Senate Agriculture committee, is co-sponsoring the Digital Commodity Consumer Protection Act (DCCPA). Mr. Colbert appeared in a CFTC financial inclusion webcast about blockchain technology in August.
    • Emily German, Subcommittee Staff Director at U.S. House of Representatives Committee on Agriculture, which has jurisdiction over the Commodity Futures Trading Commission (CFTC). Ms. German serves the interests of Democrats on the House Ag Committee and its Chairman, Rep. David Scott (D, GA).
    • Tim Hite, Financial Services Counsel for Congressman Warren Davidson (R, OH). Rep. Davidson has been an active Member when it comes to cryptocurrency legislation (such as the Digital Taxonomy Act and Token Taxonomy Act) which includes his participation in the House Financial Services Committee and the Blockchain Caucus.

Ron Hammond, Director of Government Relations at Blockchain Association and a former staffer for Rep. Davidson, moderated the discussion.

FTX fallout for this Congress

With FTX’s imploding looming over the conference, Hammond didn’t waste any time by asking staff members about the FTX elephant-in-the-room particularly as it related to DCCPA and where FTX and its founder/CEO Sam Bankman-Fried had taken an active, aggressive role in lobbying efforts.

Just prior to the panel, the House Financial Services Committee announced it would convene a hearing about FTX in December.

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