Government regulators are increasingly focused on blockchain and cryptocurrency activity, a development that some, such as IMF head Christine Lagarde have called inevitable. In the US, the Financial Crimes Enforcement Network (FinCEN), the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC) have issued statements, enforcement actions, and penalties involving blockchain and cryptocurrency activities, and they are not the only agencies monitoring these activities.  As a result, it is important for industry participants to be prepared to respond to potential regulatory inquiries.

This is why Steptoe has partnered with Thomson Reuters to publish a “one-stop” guide to the regulatory landscape and best practices for responding to blockchain and cryptocurrency-related investigations.
Continue Reading A “One-Stop” Guide to Blockchain Regulation and Best Practices for Responding to Investigations

On July 26, 2017, the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury assessed a civil monetary penalty of $110,003,314 against Canton Business Corporation (BTC-e), one of the largest virtual currency exchanges by volume in the world, and a $12,000,000 penalty against Alexander Vinnik, a Russian national who allegedly controlled, directed, and supervised BTC-e’s operations, finances, and accounts. On the same day, a 21-count criminal indictment against BTC-e and Mr. Vinnick was unsealed, and Mr. Vinnick was arrested in Greece.

This is the second supervisory action that FinCEN has taken against a virtual currency exchanger, and the first against a foreign entity operating as a money services business (MSB) with activities in the United States. FinCEN’s action also imposes the second highest civil monetary penalty assessed against an MSB to date. FinCEN has increasingly brought enforcement actions against MSBs and other non-traditional financial institutions, and similar actions seem likely in the future.Continue Reading Significant FinCEN Action Against BTC-e, Implications for Virtual Currency Exchangers