Topic: USA Subsection Needed? (POLL) (Read 4031 times)

US Credit Card Company to Integrate USDC, SEC No-Action Letter Addresses ERC20 Token, Tax Bodies Address Crypto, US and State Enforcement Continues
Blog The Blockchain Monitor
Baker & Hostetler LLP
Baker & Hostetler LLP logo
OECD, USA December 4 2020
In this issue:

• Credit Card Company to Integrate USDC Payments, 401(k) Advisor Integrates Bitcoin

• SEC Issues No-Action Letter on Digital Assets, Second Addresses ERC20 Token

• FinHub Role Expands, Foreign IPO and Lending Service Integrates Crypto

• Tax Bodies Address Cryptocurrencies, Exchanges React to Evolving Landscape

• US and State Enforcement Agencies Take Action Against Crypto Fraud Schemes

• Foreign Regulators Scrutinize Privacy Coins, Seize/Sell Criminal Crypto

 

Credit Card Company To Integrate USDC Payments, 401(k) Advisor Integrates Bitcoin

A major U.S. credit card company has announced plans to link its global payments network of over 60 million merchants to a cryptocurrency startup’s Ethereum-based U.S. Dollar Coin (USDC). Although the credit card company itself will not custody the digital asset, the two companies will begin working to help credit card issuers begin integrating software for USDC into their platforms to enable USDC payments. Those businesses will in turn be able to send international USDC payments to any business supported by the credit card company, convert USDC into the local national currency and spend the funds anywhere that accepts the company’s credit card. The companies also plan to release a new credit card in the future that lets businesses send and receive USDC payments directly from any business using the card.

Digital Asset Investment Management (DAiM), a California-based registered investment advisor, recently announced that it has launched the first ERISA-compliant employer-sponsored 401(k) plans that integrate bitcoin into plans’ asset allocation. DAiM will serve as advisor and fiduciary to companies looking to create model portfolios of varying risk profiles comprising traditional assets and allocations of up to 10 percent of bitcoin.

A Japanese banking giant has announced plans to launch a blockchain payment network in 2021. The company expects the network to be fully functional throughout Japan by summer 2022.

For more information, please refer to the following links:

Visa Partners With Ethereum Digital-Dollar Startup That Raised $271 Million
Digital Asset Investment Management (DAiM) launches first ERISA compliant employer-sponsored 401(k) plans with Bitcoin
Japan’s Banking Giant MUFG Plans to Launch Blockchain Payment Network in 2021
SEC Issues No-Action Letter on Digital Assets, Second Addresses ERC20 Token

The Division of Corporation Finance (CorpFin) of the U.S. Securities and Exchange Commission (SEC) issued its third no-action letter addressing digital assets, which is its second no-action letter addressing an ERC20 token. The no-action letter request involves “an online software application that people use to interact in virtual venues, play games … and offer and obtain virtual goods and services.” The “heart” of the platform is a virtual economy using digital credits, which cannot be transferred or used off the platform. The platform requested no-action relief to use an ERC20 token instead of the credits. The ERC20 token would have real value and can be transacted on and off the platform. CorpFin noted significant factors in granting the no-action relief, which include:

The company will not use proceeds from the sale of the digital asset to finance the upgrade from credits to the digital asset, which will be fully functional and operational immediately upon its launch and before any digital asset is sold.
The digital asset will be immediately usable for its intended purpose at the time it is sold.
Digital asset holders will be subject to know your customer/anti-money laundering checks when they establish open wallets and on an ongoing basis.
The digital asset will be made continuously available in unlimited quantities and at a fixed price.
The company will not promote or support listing or trading of the digital asset on any third-party trading platform.
Users who purchase the digital asset from the company will be required to affirm that they are acquiring the digital asset for consumptive use and not for speculative purposes.

There might be a more misguided segregation request in this forum somewhere, but I haven't seen it.

Even if we warn exchangers not to deal with Americans, they still will deal with them

I still don't understand the distinction.  Whether you're a US based exchange selling to Panamanians, a Panama based exchange selling to Americans, a US based exchange selling to Americans, or a Panamanian based exchange selling to Panamanians, the rules are essentially the same.  It may determine whether the SEC or the SMV is more or less likely to be the relevant enforcer, and you might make a practical judgment there about who you'd rather go up against (The SMV tends to be more relaxed, but they also can be pressured more politically if you've pissed off the wrong person, and they have greater investigative powers as they are a unified financial regulator.  The SEC has substantially greater resources, but they're also usually more responsive and organizationally easier to deal with, they're more independent politically, but also more reliant on inter-agency cooperation), but from the neutral standpoint of this board, neither is preferable to the other.

You are absolutely correct.  I should have specified "warn US Based exchanges not to deal with Americans".

If you're going to do that, will you also warn them not to deal with essentially every other country in the world?  With the exception of a few (China, the UAE, Brazil, and Nigeria come to mind), nearly every other country's securities laws are modeled significantly after the US system.

Edit:  Similarly, AML compliance (while less likely to track the US scheme) is also detailed and complex in nearly every country, the impact of FATF and related FSABs worldwide on national policies has been far reaching.  Singling out the US as if it's laws are somehow uniquely onerous is just idiotic and demonstrates complete ignorance about the international environment for investment and AML compliance regulation. 

FWIW I voted for:   Warn exchangers not to deal with Americans

And the first stock exchanges were in Europe, so we all learn from each other.  If you need to feel separate, stick a [USA] in your thread title or something distinctive.
Hiding all the USA stuff in its own little sub forum doesn't improve matters.

We can't help it if we're exceptional! 

But ultimately I think I agree with you, though for different reasons.  The securities laws of many jurisdictions are based on US law anyway, the world is our subsection, suck it nerds.

A law ghetto?

Law is a matter of geography everywhere.  Why exacerbate US exceptionalism?

The JOBS Act has/will provide some avenues, but for the most part they [will] either: a) provide avenues for accredited investors or b) still require registration, but reduce regulatory burdens on small issuances. 

It's particularly inaccurate now, with the beginning of the JOBS Act implementation, ya? 

Even so, we need a USA subsection.  How 'bout it admins?

Well yes, there are always exceptions and OPs statement would have been overly-broad and inaccurate even if he had said it exclusively about equity funding.  That said, what I was trying to point out was that when it comes to raising capital, equity financing by default creates a security, while debt financing does not (it can, it just doesn't do it by default).  Registration requirements for offerings and sales apply to all securities unless explicitly exempted, so it's probably fair to say "As a small business-person you are not allowed to ask anyone in public for equity funding" even though there are some very unique types of equity funding that don't create securities and there are some equity securities that are explicitly exempt, because as a general rule that's correct.  With debt financing, registration requirements are the exception rather than the rule, and so saying it about borrowing with interest is flat wrong, it's nether absolutely true nor even generally true, only sometimes true. 

There are exceptions to each of the ANYONE blanket statements made in the OP.
Some but not all business transactions fall within these regulatory governance parameters.
Most private business transactions are just that.

This is inaccurate.  Privately negotiated lending does not have to be registered per se in the US, even if the initial solicitation is public, so long as it doesn't otherwise qualify as a security under the '33 and '34 acts.  The catch-all in the '33 acts definition of "security," the investment contract, is not broad enough to cover private non-standardized lending (as broad as it is).

CFTC and SEC are federal US, not state.
Federal law is mostly silent on small lending.
An exception being the Dodd-Frank Wall Street Reform and Consumer Protect Act of 2010 which created the Consumer Financial Protection Bureau, but there's not much to it, mostly it is focused on helping consumers understand credit terms.
http://www.consumerfinance.gov/strategic-plan/#overview

State lending rules are a different matter entirely but generally if you are incorporated in a state, you get the rules of that state nationally.  Lending a commodity is generally not an issue, unless you are a large bank expecting to be governed by BASEL III and have reserve requirements.

Absolutely, because it may be a commodity you need to be careful writing contracts around it.  Offering to pay someone 1.1 btc for a 1 btc loan at some future date might be a problem in many states.

No, not really.  Commodities are not securities.

The regulatory authority is different as well, securities are SEC regulated, commodities (futures contracts) are regulated by CFTC.
Commodities are not regulated in this way, just the contracts on them.
You can buy wheat, you can buy gold, you can buy the actual stuff.  The SEC and CFTC care about the paper, not so much the actual stuff unless it fits the structure of a futures contract.

btceic you should look through this section of the forums.  There is great advice in this "legal" section that answers the kind of question you are asking.  Just click here:

https://bitcointalk.org/index.php?board=74.0

If you can't find what you need you may want to start a new thread. 

You can with coinbase

edit: Coinbase is registered as an MSB

My questions:
As a user do we have anything to worry about?
As a miner do we have anything to worry about?

Things that I do with bitcoin:
buy bitcoin, buy stuff with bitcoin, mine bitcoin
I purchased 10 "shares" of a group buy for KnC miners, they went "public" with an IPO on bitfunder, I was issued 1000 shares of the group buy.

Are any of these activities illegal?