Mayer Brown
Digital Assets Download

November 3, 2023


Digital Assets Download – A Marathon, Not a Sprint: This weekend, the world’s greatest long-distance runners will converge on New York City for the 52nd New York City Marathon. Just like all of the builders and advisors in the digital assets world, they’ll need endurance and speed to overcome unpredictable conditions and stressful situations to achieve amazing things. The runners will also have enthusiastic crowds giving them a boost to achieve their goals.

Here at the Digital Assets Download, we are the enthusiastic crowd that looks for ways to boost builders in the marathon that is blockchain development. As part of that, in this issue we talk about California’s new digital assets law and, most importantly, how it is likely to impact specific types of companies and products. We also describe the latest crypto proposal from FinCEN and our “Lingo” may help to explain why a new type of bitcoin financial product may be on the horizon.

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.

California Passes Expansive “Crypto” (Digital Financial Asset) Licensing and Compliance Law

On October 13, 2023, California enacted the Digital Financial Assets Law (“DFAL”). The new law, which takes effect on July 1, 2025, establishes a comprehensive framework for the licensing and oversight of businesses that engage in “digital financial asset” (“DFA”) business activities with or on behalf of California residents. The broad and comprehensive regime established by the DFAL makes it one of the most significant state-specific digital asset laws in the United States. While there are important exemptions under the DFAL for both entities and activities that limit the new law’s application, the DFAL is likely to disproportionately impact certain types of companies. In this Legal Update, we offer insight on the nature and scope of the DFAL requirements and provide some practical thoughts on how businesses may need to adapt their digital asset activities in the face of the DFAL.

FinCEN Proposes Recordkeeping and Reporting Requirements For Convertible Virtual Currency Mixing

On October 23, 2023, Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking (NPRM) that would impose additional requirements on domestic financial institutions for transactions involving convertible virtual currency (CVC) mixing that occurs within, or involving a jurisdiction outside, the United States. FinCEN’s issuance of the NPRM is based on its finding that CVC mixing constitutes a primary money laundering concern, and imposing recordkeeping and reporting requirements would combat international money laundering and other financial crimes by increasing transparency in transactions involving CVC mixing.

In this Legal Update, we provide an overview of the key aspects of the NPRM.



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

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.

Hearing Entitled: Modernizing Financial Services Through Innovation and Competition

In the US House of Representatives, the Subcommittee on Digital Assets, Financial Technology and Inclusion of the Financial Services Committee held a hearing on Wednesday, October 25, 2023.

Commissioner Mersinger Participates in a Fireside Chat at the State of Crypto Policy and Regulation Conference

On October 24, 2023, US CFTC Commissioner Summer K. Mersinger participated in a fireside chat at the State of Crypto Policy and Regulation Conference.

Responsible Innovation in Money and Payments

On October 17, 2023, Federal Reserve Governor Michelle W. Bowman discussed innovation in money and payments at the Harvard Law School Program on International Financial Systems Roundtable on Central Bank Digital Currency in Washington, D.C.


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.

Spot Bitcoin ETFs vs Futures Bitcoin ETFs

Spot bitcoin ETFs and futures-based (or derivatives-based) bitcoin ETFs are both investment products that can provide investors with exposure to changes in the price of bitcoin (i.e., the underlying asset). However, the type and structure of this exposure differs among them.

Spot bitcoin ETFs directly hold bitcoin and are designed to reflect the “spot,” or current price of bitcoin.

On the other hand, derivatives-based bitcoin ETFs use financial instruments like futures contracts to replicate bitcoin's prices. However, they do not directly hold bitcoin. Instead, the ETFs hold bitcoin derivatives -- financial agreements through which a party will buy or sell bitcoin at a specified price on a pre-determined date in the future.

As of November 3, 2023, US regulators have yet to approve a spot bitcoin ETF for the United States, even though many spot bitcoin ETFs already exist outside the United States and many of the world’s largest traditional asset managers have made applications to the SEC for a US version. (Numerous futures bitcoin ETFs have been approved in the United States.) However, the US SEC recently lost a court case related to its rejection of an application for a spot bitcoin ETF, which has raised expectations that a spot bitcoin ETF may be approved for the US market in the near-future.



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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