Mayer Brown
Digital Assets Download

October 14, 2022


Digital Assets Download, Powered by Mayer Brown

In case you weren’t keeping up with the Kardashians, one of them agreed to pay the SEC $1.26 million to settle an ongoing investigation into her promotion of the Ethereum Max token. To see what else you may have missed in the world of digital assets, check out the latest edition of Digital Assets Download, Powered by Mayer Brown.

For the Uninitiated: Digital Assets Download is a curated mix of insights and headlines that provide a Layer 3 Legal Perspective™ on the digital assets multiverse – created by Mayer Brown’s global Digital Assets, Blockchain & Cryptocurrency group. Check out all of our previous editions of the Digital Assets Download here.

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Original Mayer Brown content, perspectives and insights from across our global platform that touch on digital assets, decentralized finance, cryptocurrencies and related fields.

What the US FSOC Report Signals About the Future of Crypto-Asset Policy

On October 4, 2022, the US Financial Stability Oversight Council (FSOC) released its Report on Digital Asset Financial Stability Risks and Regulation (FSOC Report). Weighing in at over 120 pages, the FSOC Report provides a thorough discussion of the US regulation of crypto-assets, with a focus on their potential financial stability risks. Most importantly, the report sets forth several policy reform recommendations and, in doing so, provides a clearer view of the Biden administration’s policy priorities with respect to crypto-assets. In this Legal Update, our team breaks down highlights from the report and assesses the report’s impact on the legislative and regulatory road ahead for digital assets.


The Legislative Tortoise Chases the Cryptoasset Hare – UK Economic Crime Regulatory Reform

The UK government introduced a draft Economic Crime and Corporate Transparency Bill 2022-23 (the "Bill") in the House of Commons on 22 September 2022. The aim of the Bill is to amend the Proceeds of Crime Act 2002 ("POCA"), which regulates the recovery and confiscation of proceeds from criminal activities and money laundering. The UK government has said POCA has not kept pace with the development of cryptoassets and related technology and the Bill would amend POCA to apply expressly to criminal and civil asset recovery powers as they relate to cryptoassets. This Legal Update describes the proposed amendments to POCA and the principal impacts of the Bill.


New Regulatory Regime for Virtual Asset Service Providers in Hong Kong – Are You Ready?

Virtual assets and blockchain technology have the potential to radically change the way financial transactions and payments are effected, giving rise to money laundering and terrorist financing (“ML/TF”) risks. Accordingly, such risks have been the subject of the Financial Action Task Force's guidance and recommendations. Hong Kong recently announced the framework of a new regulatory regime for virtual assets and associated products and services to combat ML/TF risks. This Legal Update provides an overview of the new regulatory regime for virtual asset service providers (“VASPs”), which is scheduled to take effect on 1 January 2023, and suggests steps on how to prepare for it.


EU Commission Proposes New Liability Rules on Products and AI

On 28 September 2022, the European Commission adopted proposals for two directives adapting non-contractual civil liability rules to artificial intelligence (“AI”). The proposed AI Liability Directive aims at targeted harmonization measures on civil liability for AI among the EU member states. The revised Product Liability Directive proposes adaptations to the producer’s no-fault (strict) liability for defective products that have caused damage to health or property or loss or corruption of data. Under the proposed Product Liability Directive, compensation is available when defective AI causes damage, without the injured person having to prove the manufacturer’s fault. Not only hardware manufacturers but also providers of software and digital services that affect a product’s function (such as a navigation service in an autonomous vehicle) can be held liable. Further, manufacturers can be held liable for changes they make to products they have already placed on the market, including when these changes are triggered by software updates or machine learning. The parallel proposal for an AI Liability Directive seeks to ensure that, where an injured person has to prove that an AI system caused damage in order to obtain compensation under national law (e.g., if someone failed a job interview because of discriminatory AI recruitment software), the burden of proof can be eased if certain conditions are met. The proposed liability rules for AI will complement other proposed EU legislation such as the AI Act, the Digital Services Act and the Digital Resilience Act.




A curated selection of headlines and news from around this multiverse—including deals, developments and other disruptions in DeFi.

Ground-breaking SWIFT Innovation Paves Way for Global Use of CBDCs and Tokenized Assets. Read More >>

The Digital Euro and the Importance of Central Bank Money. Read More >>

Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-assets, and Amending Directive (EU) 2019/1937 (MiCA) - Letter to the Chair of the European Parliament Committee on Economic and Monetary Affairs. Read More >>

US Senator Hickenlooper to SEC Chair Gensler: Time for Clear Rulemaking on Digital Assets Instead of Continued Regulation by Enforcement. Read More>>

The US Financial Accounting Standards Board (FASB) Unanimously Voted to Require Companies to Account for Crypto Assets at Their Fair Value. Read More >>

Washington, D.C., Is Starting to Crack Down on Crypto. Read More >>

Portugal to Tax Crypto Gains in Next Year’s Budget Plan. Read More >>

America’s Oldest Bank, BNY Mellon, Will Hold That Crypto Now. Read More >>

Google Cloud to Let Users Pay With Bitcoin, Ethereum, Dogecoin via Coinbase. Read More >>

EU Lawmakers Pass Landmark Crypto Assets Regulation Bill. Read More >>

FTX Targets Latin America With Visa Debit Card—With Europe and Asia Next. Read More >>

US SEC Probing Bored Ape Creator Yuga Labs Over Unregistered Offerings: Report. Read More >>

Crypto Giant Coinbase Gets Singapore Licence.

US Fines Crypto Exchange a Record $24 Million for Breaking Sanctions. Read More >>

A Red October for Crypto Hacks: Over $700 Million Stolen from DeFi Protocols This month So Far. Read More >>




Selected events for deeper dives into different parts of the digital assets and DeFi world.

Cyber Spotlight: Ransomware 3.0 War Stories – Triple Extortion, Sanctions Risks, and Best Practices from the Trenches

The Biden administration and US regulators continue to assess how to fight ransomware cybercriminals using digital assets for illicit means. As part of our Cybersecurity & Data Privacy group’s commitment to Cybersecurity Awareness Month, our team is hosting “Cyber Spotlight: Ransomware 3.0 War Stories – Triple Extortion, Sanctions Risks, and Best Practices from the Trenches” on Tuesday, October 18, 2022. For more details, including how to register, please see here.




For those new to the digital assets and DeFi world, each edition of the Digital Assets Download will highlight a different term to help you be a part of the conversation.

Proof of Work ("PoW")

Proof of Work (“PoW”) is the consensus mechanism (see our July 22 Lingo here) used by the Bitcoin blockchain (among others). PoW blockchains are secured and transactions on them are verified by network participants—called miners—that compete to be the first to solve a mathematical puzzle. The miner that completes the puzzle first adds the newest batch of data or transactions to the blockchain. Miners are incentivized to participate in this system with a reward of new cryptocurrency for the miner that is the first to solve each puzzle and accurately validate the new data (corresponding to each transaction being validated on the network). PoW requires a large amount of computer processing power and the energy required to power those processes is one source of criticism of PoW consensus mechanisms.




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