Beyond Best Practices_ Regulatory Compliance Now a Necessity in the Cryptocurrency Sector _ Ballard Spahr LLP - JDSupra bitcoin price 2008

Beyond Best Practices_ Regulatory Compliance Now a Necessity in the Cryptocurrency Sector _ Ballard Spahr LLP – JDSupra bitcoin price 2008

As the value of bitcoin continues to soar (USD:BTC this past weekend exceeded $19,000.00:1), we thought that now would be a good time to emphasize the need to ensure regulatory compliance with the many federal and state AML rules and regulations, in addition to those segmented across various countries. A caveat: this post is far from exhaustive, and before undertaking any investment in cryptocurrency, it would be wise to consult with an attorney familiar with the rules applicable to the cryptocurrency sector. Due to the nascency of the sector, the practical application of previously existing laws and regulations is rapidly evolving.

To begin, the notion that bitcoin and other digital tokens represent a currency only for criminals has been dispelled.

Indeed, there is no question that investment in cryptocurrencies is inherently lawful and increasingly commonplace.Bitcoin price 2008 in 2017 alone, investment in initial coin offerings, or token sales, has exceeded $1.5 billion; in a similar vein, the value of certain cryptocurrencies now exceeds a number of fortune 50 companies. Most recently, CBOE and CME, the world’s largest futures exchange, launched bitcoin futures contracts.

With this in mind, and as we have written on this blog before (see here, here, here, here, here, here, here, here, and here), it is clear that regulators are moving aggressively to bring the cryptocurrency sector into the fold of existing rules and regulations. To be sure, applying these rules to the burgeoning sector has been like fitting a square peg in a round hole; a bedrock of the initial cryptocurrency boom was the promise of anonymity for its users. Conversely, identity verification is a bedrock of AML compliance.Bitcoin price 2008

Nevertheless, regulators have forged ahead and, upon the U.S. Treasury’s financial crimes enforcement network’s (fincen) declaration that digital currency exchanges are “money services businesses,” or msbs, it is now clear that such businesses are subject to the bank secrecy act (“BSA”) and related state anti-money laundering statutes. Importantly, the handling of digital currencies can be subject to the BSA even though the currencies are not traditional, “fiat currency” — according to fincen, because a digital currency can represent a “value” that “substitutes for currency,” an exchanger of digital currency is a MSB. At the state level, the new york state department of financial services has been a leader in promulgating rules applicable to cryptocurrencies. For example, in june 2015, the agency created the first-of-its-kind business license for virtual currency activities, known as a bitlicense.Bitcoin price 2008 the law requires, in part, crypto-businesses to comply with AML, “know your customer” (“KYC”), and other money transmission regulations. Other states have more traditional laws regarding money transmission which may apply to crypto-businesses.

All told, traditional monitoring mechanisms have been playing an increasing role in the cryptocurrency sector. For example, nearly every digital currency exchange now requires new registrants to undergo a series of KYC verification steps, and once verified it is often the case that the purchase and sale of cryptocurrencies is capped at a relatively modest amount, at least for a certain period of time. Indeed, these developments have helped to provide assurance to individual investors that participation in the cryptocurrency boom can be entirely legitimate.Bitcoin price 2008

In sum, the excitement surrounding digital currencies has provided an immense opportunity for those interested to safely and lawfully participate. However, it is also the case that layers of regulatory oversight continue to take shape. With this in mind, there is little doubt that businesses considering operating in the sector must adopt a goal of understanding registration and reporting requirements, and furthermore, the extent to which internal policies and procedures are necessary to ensure compliance with the BSA and other related state anti-money laundering laws.


JD supra provides users with access to its legal industry publishing services (the service) through its website (the website) as well as through other sources. Our policies with regard to data collection and use of personal information of users of the service, regardless of the manner in which users access the service, and visitors to the website are set forth in this statement (policy).Bitcoin price 2008 by using the service, you signify your acceptance of this policy.

Information collection and use by JD supra

JD supra collects users’ names, companies, titles, e-mail address and industry. JD supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the service, including email alerts to which users have subscribed; to manage the service and website, to improve the service and to customize the user’s experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.Bitcoin price 2008

JD supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the website may result in certain parts of the website not operating correctly or as efficiently as if cookies were allowed. Email choice/opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the opt-out of future email option in the email they receive from JD supra or in their JD supra account management screen.


JD supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff.Bitcoin price 2008 however, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.Com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances. Sharing and disclosure of information JD supra collects

Except as otherwise described in this privacy statement, JD supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD supra, users of the service, website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our terms conditions of use.Bitcoin price 2008

In the event there is a change in the corporate structure of JD supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD supra may, in its sole discretion, transfer, sell or assign information collected on and through the service to one or more affiliated or unaffiliated third parties.

Links to other websites

This website and the service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the service through the website and link to another site, you will leave the website and this policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies.Bitcoin price 2008 we shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This policy applies solely to the information collected in connection with your use of this website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in our privacy policy

We reserve the right to change this policy at any time. Please refer to the date at the top of this page to determine when this policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the website. By continuing to use the service or website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this policy, as it may be amended from time to time, in whole or part, please do not continue using the service or the website.Bitcoin price 2008

Contacting JD supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.Com.