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We recently hosted our third International Festival of Fintech. Leading international industry experts joined members of the global Clifford Chance fintech team to offer their insights and practical guidance on navigating rapidly-evolving legal, regulatory and market developments across the sector. Recordings of all of our Festival sessions are now available on demand.
View the SessionsOn October 19, 2023, the Consumer Financial Protection Bureau issued a proposal on Personal Financial Data Rights (Proposed Rule), which implements section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1033) and accelerates a shift to open banking in the United States. This is a meaningful development as the United States catches up to other jurisdictions around the world, including e.g., Europe and Australia, where open banking regulations came into force in 2019. Comments to the Proposed Rule are accepted through December 29, 2023, and the CFPB intends to finalize the regulation by Fall 2024
ReadArtificial intelligence (AI) is not a new phenomenon in the financial services sector. For decades, financial institutions (FIs) have used AI to automate processes, enhance customer service, detect and deter fraud, and optimize investment strategies. However, as AI becomes more advanced and ubiquitous, it also poses new and complex cybersecurity risks that require careful management and mitigation.
ReadThe new EU banking package (CRR3/CRD6) amending the Capital Requirements Regulation and Directive (CRR/CRD) includes a transitional regime for the risk-weighting of EU banks' exposures to cryptoassets that will apply until new legislation implements the Basel Committee's standard on cryptoassets, as well as new provisions on the reporting, disclosure, governance and supervisory review of cryptoasset exposures.
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As the global thinking in respect of central bank digital currencies (CBDCs) evolves, models for public-private collaboration for distributing CBDCs are becoming clearer. This includes proposals by the Bank of England as well as the recent ground-breaking Project Sela from the Bank for International Settlements (BIS) Innovation Hub, the Bank of Israel and the Hong Kong Monetary Authority (HKMA), which aimed to reduce financial exposure for retail CBDC intermediaries by developing a model where they are not required to hold client assets.
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Arbitration has many features that make it well suited to disputes relating to cryptoassets and smart contracts and it is fast becoming the dispute resolution option of choice in the crypto sector. The inherent flexibility of arbitration and party autonomy can help to address many of the unique technical challenges arising from cryptoassets. However, technology, unique procedural options and public policy issues also give rise to specific concerns when arbitration is used.
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The regulatory landscape for cryptoassets is set to change in both the EU and the UK, through the introduction of new, comprehensive regulatory frameworks for cryptoasset service providers. With MICA set to come into force in the EU, the UK is coming under some pressure to provide clarity on the scope of its new regime quickly, to provide firms with certainty they need and details of both regimes are yet to be fleshed out by regulators starting later in 2023.
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We have published a comprehensive new report in collaboration with digital asset custodian Komainu looking at the custody of cryptoassets across 9 jurisdictions (Australia, Germany, Japan, the Netherlands, Singapore, the UAE, the UK, the US, and Jersey with input provided by Carey Olsen). The report aims to improve clarity for market participants on best practice, as well as draw attention to areas of legal and regulatory uncertainty where it would be helpful for legislators and regulators to take action that enhances certainty.
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The recent Court of Appeal decision in Tulip Trading Limited v van der Laan and Others [2023] EWCA Civ 83 has generated significant interest in the Bitcoin community and the wider digital asset sector. The claimant asks the English court to order software developers alleged to control various Bitcoin blockchains to modify source code to restore the claimant’s control over Bitcoin for which its private key has been stolen.
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On 16 December 2022, the Basel Committee on Banking Supervision (BCBS) published a finalised prudential standard on banks' cryptoasset exposures (the Cryptoassets Standard) following two rounds of consultation. We look at what the final proposals say and the impact for market participants.
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In this article we explore the key concepts under the Amended AMLO and outline the amended extended timeline for commencement of the licensing regime for VASPs.
HM Treasury has proposed a comprehensive regulatory regime for firms engaging in certain cryptoasset activities. It is enabled by the addition of a new Clause 65 into the Financial Services and Markets Bill (FSMB), which will allow HM Treasury to expand the UK's regulated activities framework to encompass cryptoasset related activities.
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While 2022 brought challenging market conditions, it was an interesting year for innovation in the capital markets.. In this article, we look ahead to some of the key developments for 2023.
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The UK Treasury has released its consultation on the future financial services regime for cryptoassets, including a proposal for a cryptoasset market abuse regime.
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Just over two years after it was first proposed, the agreed text of the new Markets in Crypto-assets Regulation (MiCA) has beenreleased. MiCA aims to create an EU regulatory framework for the issuance of, intermediating and dealing in, cryptoassets. It will introduce licensing and conduct of business requirements as well as a market abuse regime with respect to cryptoassets. With parts of MiCA anticipated to come into force from spring 2024, we look at what issuers of stablecoins and other cryptoassets, custodians and other crypto service providers need to know now.
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The Hong Kong Government issued a policy statement on 31 October 2022 in conjunction with the city's flagship Hong Kong Fintech Week conference, which unveiled several key changes to the city's regulatory stance towards virtual assets (VA), in particular allowing retail access to VA futures ETFs, and launching consultation on the degree of retail access to VA, among other updates.
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On 10 November 2022, the European Parliament voted to adopt a new EU regulation on digital operational resilience for the financial sector (DORA). With obligations under DORA coming into effect late in 2024 or early 2025 at the latest, in this article we take a closer look at its impact and consider what the regulation will mean for firms, their senior managers and operations and what firms should be doing now in preparation for day one compliance.
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The Italian Government published the bill of the Budget Law for 2023 envisaging the introduction of a set of rules for the taxation of crypto assets. As from they were first launched in 2009, cryptocurrencies and, more in general, crypto assets have not been the object of specific tax laws. Their tax treatment has been based on general principles and (heavily criticized) guidance issued by the tax authority.
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The cryptoasset markets are facing an extended period of volatility and uncertainty following the bankruptcy filings of significant market participants. Liquidity and solvency concerns are increasing across the market as the fallout from such insolvencies is felt. As a result, crypto market participants would be well advised to review and consider the terms of their existing agreements, the position of their counterparties and steps that can be taken to protect themselves in all relevant jurisdictions in the event of future price fluctuations, further distress among market participants, and potential insolvency proceedings.
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On 15 September 2022, in a highly anticipated upgrade called "The Merge", the Ethereum Mainnet shifted from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS) consensus mechanism.The Merge is the second of a three stage upgrade process and is widely seen as one of the most significant events in the crypto industry to date in the search for a more scalable, energy efficient and publicly accessible Ethereum.
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According to nonfungible.com, the global non-fungible token (NFT) market was estimated to be worth around $16.8 billion in 2021. In this article, we explore some of the key intellectual property considerations relating to NFTs.
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The UK Financial Services and Markets Bill includes proposals to regulate cloud service providers and other designated ‘critical third parties’ supplying services to UK regulated firms and financial market infrastructures. HM Treasury would have powers to designate service suppliers as ‘critical’ and the UK regulators would have new powers directly to oversee designated suppliers, which would be subject to new minimum resilience standards.
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Over the past few months, capital markets have seen an increased interest in the issuance of securities, notably debt instruments, natively on the blockchain or using other types of distributed ledger technology (DLT). We look at how Luxembourg, France and Germany have taken the lead by adopting specific legislation allowing companies to issue securities directly on the blockchain, and thus providing the required legal certainty.
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In a podcast originally recorded for the Loan Market Association, Clifford Chance lawyers and tech experts Puja Patel, Alice Jefferis and Bram Kocken share their insights on digitalisation in the syndicated loan market, exploring technological developments, the challenges faced by the industry and debating the elusive question – is a digital syndicated loans market fact or fiction?
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Our weekly global fintech round-up, summarises fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events
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The Tech Policy Unit Horizon Scanner is our monthly dive into the key tech policy and legislative developments around the world.
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This monthly newsletter provides you with a monthly brief into the world of digital assets, keeping you up to date with regulatory developments, publications and events from across jurisdictions.
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The paper outlines the opportunities, challenges, and questions concerning the design, issuance, and legal status of wCBDCs, while introducing use cases to provide a framework for continuing a constructive conversation.
Read on AFME WebsiteUpcoming events
We are delighted to be hosting the 2024 TradFi Meets Blockchain Policy Summit on behalf of Capitol Asset Strategies at our office in New York. Join us for thoughtful panel conversations focused on traditional capital markets use of distributed ledger technology to sell and distribute regulated "tokenized" financial products and the real business and regulatory challenges to wider adoption. You will hear from expert business leaders, legal professionals and policy leaders with panelists and attendees spanning traditional finance and crypto-native, all together in one room for insights on this growing market. | See the full agenda and speaker line up or register here.
Time: from 11:00 EDT
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