Mayer Brown
Digital Assets Download
 

October 6, 2023
 
 

Digital Assets Download – All the “Other” Digital Assets Stories That Matter: While we’ve heard there is a trial happening in New York that some in the crypto world will be watching, our eyes are focused on the digital assets horizon and all the developments you need to keep building in this space. Not surprising to anyone, regulatory evolution is ongoing, and in this edition, we have two reports from the regulatory horizon in the United States and United Kingdom. Finally, our “Learn the Lingo” section focuses on a type of fraudulent scheme that has increasingly focused on theft of crypto assets.

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.)

Sharing Is Caring: Please share this edition of the Digital Assets Download via LinkedIn and Twitter, and tell us how we can better serve as your oracle to the digital assets world.

 
 
 
Lead Block
 

Perspectives and insights from Mayer Brown lawyers and other thought leaders that touch on digital assets, decentralized finance, cryptocurrencies and related fields.

Navigating the Travel Rule for UK Cryptoasset Businesses

On 1 September 2023, the Travel Rule requirements for cryptoassets came into force in the United Kingdom. The Travel Rule will require cryptoasset businesses to collect, verify, and share information relating to certain cryptoasset transfers.

The FCA states the Travel Rule is designed to bring "greater transparency to cryptoasset transfers" and help cryptoasset businesses "detect suspicious transactions and carry out effective sanctions screening." Although the Financial Action Task Force has called on other jurisdictions to implement the Travel Rule on an expedited basis, not all are acting quickly. Consequently, the application of the Travel Rule across jurisdictions will vary.

This Legal Update explains: (1) what the Travel Rule for cryptoassets is; (2) what steps are required for compliance; and (3) what challenges cryptoasset businesses face to navigate the Travel Rule effectively.

US Internal Revenue Service Proposal Would Significantly Expand Reporting Requirements for Cryptocurrency and NFT Transactions

Tucked within 2021’s Infrastructure Investment and Jobs Act was a mandate for extensive US tax reporting for cryptocurrency and NFT transactions. Recently, the US Internal Revenue Service has responded with over 200 pages of proposed regulations to implement this mandate. Importantly for DAOs and exchanges that will be subject to the new rules, the proposed regulations require that such persons capture basis information for digital assets purchased by their customers in 2023. Mayer Brown partner Mark Leeds provides an overview and commentary on the proposed regulations in this Legal Update.

 
 
 
News
Events
 

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

Hearing: Artificial Intelligence in Financial Services

In the US Senate, the Banking, Housing and Urban Affairs Committee held a hearing on Wednesday, September 20, 2023.

CFTC Commissioner Johnson Provides Opening Remarks at the CFTC’s “Technology and Fraud: Stopping Scams in a Digital World” Virtual Event

On October 4, 2023, US CFTC Commissioner Kristin N. Johnson provided opening remarks at a CFTC Office of Customer Education and Outreach and Office of Technology Innovation virtual event on social media investment fraud and artificial intelligence for World Investor Week.

CFTC Commissioner Johnson Participates in a Fireside Chat at the Fordham Law Blockchain Regulatory Symposium

On October 2, 2023, US CFTC Commissioner Kristin N. Johnson participated in a fireside chat with former CFTC Chair J. Christopher Giancarlo at the Fordham Law Blockchain Regulatory Symposium.

Cyber Risk in the Banking Sector

On October 5, 2023, US Federal Reserve Vice Chair for Supervision Michael S. Barr discussed cyber risk in the banking sector at the Large and Foreign Banking Organizations Cyber Conference on Managing Cyber Risk from the C-Suite at the Federal Reserve Bank of Cleveland in Cleveland, Ohio.

Digital Assets Trading and Investing

On November 6, 2023, Mayer Brown partner Mark Leeds will speak on “Digital Assets Trading and Investing” at the Beryl Elites Investments Conference in New York City. For more information, please visit the conference website.

 
 
 
Learn the Lingo
 

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.

Pig Butchering

Pig butchering is a type of fraudulent scheme in which victims are lured into digital relationships to build trust in order to steal money, often in the form of cryptocurrency.

These multi-step schemes often begin with unsolicited contact by the fraudster and attempts to build an online relationship using fake social media profiles and data mined from the victim’s digital life. Over time, the fraudster will steer conversations toward investment-related topics before eventually convincing the victim to invest in cryptocurrency platforms where funds can be redirected and stolen.

The graphic name for this type of scheme comes from the weeks- or months-long process of “fattening” the victims prior to the theft of their funds.

Regulators such as FinCEN have highlighted red flags in these schemes and ways investors can protect themselves from becoming victims.

 
 
 
 

Writings on the Wall, Translating ‘Crypto’ Terms with Mayer Brown

From Airdrop to Wrapped Token, our illustrated glossary, “Writings on the Wall, Translating Securities with Mayer Brown,” has been updated with additional digital assets and cryptocurrency terms. Check out our “featured” list for the crypto terms and the full list of terms.
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