FinTech & Blockchain

  • Advising a client on matters relating to digital currency-denominated securities trading.
  • Advising a client on the use of distributed ledger (blockchain) technology in the trading, clearance, and settlement of security-based swaps.
  • Advising a client on retail client disclosures for crypto-related investments.
  • Advising a client on the regulatory aspects of an Initial Coin Offering.
  • Representing a director in an SEC investigation of an Initial Coin Offering.
  • Representing a cryptocurrency fund under scrutiny from the SEC.
  • Providing regulatory and compliance counsel to a tech start-up that is disrupting the private capital formation marketplace.
  • Advising a client on the regulatory scrutiny of SAFTs.

Looking Forward

Growth. With cryptocurrencies hitting all-time highs late in 2021, following an almost two-year run up in value, institutional adoption and investment have rapidly increased and M&A activity is substantial. Growth continues to be global, and companies are as interested in other markets as they are in the U.S., despite its traditional role as leader in tech. Even a decrease in crypto prices in 2022 is unlikely to slow the continued investment and disruption from crypto. We expect to see convergence in the coming year of traditional finance and DeFi as traditional financial firms recognize the promise of DeFi, as well as its potential to disrupt the financial services industry, and regulators cajole some DeFi firms into regulated entities. Expect traditional intermediaries, such as securities broker-dealers, to partner with crypto firms to provide customers with a full suite of financial products. Facebook’s move into the metaverse may presage competition from Big Tech, bringing even more attention to the space.

Enforcement. The new SEC leadership has made clear that they are building a wave of enforcement actions in this space, especially against digital asset marketplaces. Other federal and state authorities are ready to follow suit. Companies need to redouble efforts to address their legal and regulatory risks.

Legislation. The calls for new crypto-focused legislation are getting louder, coming from both sides of the political spectrum, as well as from regulators. A report on stablecoins from the President’s Working Group in November 2021 called for comprehensive legislation to address systemic risks. Although multiple bills are in various stages of being introduced in Congress already, it remains unclear how strict or permissive any new laws will be. We expect a strong lobbying effort from various crypto trade organizations as well as major crypto companies.