Issue link: https://digital.shearman.com/i/1479657
U.S. Regulation of Cryptoassets 36 Within 180 days of the date of President Bidens March 9, 2022 executive order, the Secretary of the Treasury, in consultation with the Secretary of Labor and the heads of other relevant agencies, including, as appropriate, the heads of independent regulatory agencies such as the FTC, the SEC, the CFTC, Federal banking agencies, and the CFPB, shall submit to the President a report, or section of the report required by section 4 of the executive order, on the implications of developments and adoption of digital assets and changes in financial market and payment system infrastructures for United States consumers, investors, businesses, and for equitable economic growth. The report will include policy recommendations, including potential regulatory and legislative actions, as appropriate, to protect United States consumers, investors, and businesses, and support expanding access to safe and affordable financial services. Presidential Executive Order on Development of Digital Assets Cryptocurrency exchanges are regulated in the U.S. under the BSA which requires that cryptocurrency exchanges register with the Financial Crimes Enforcement Network (FinCEN), implement AML / CFT programs, maintain appropriate records, and submit reports to authorities. The BSA imposes anti-money laundering obligations on various U.S. financial institutions, including "money services businesses" (MSBs). Under the BSA, businesses that transact in cryptocurrencies may qualify as money transmitters, a type of MSB. An MSB must register with FinCEN, implement anti-money laundering controls, and ensure ongoing compliance with recordkeeping and reporting requirements. Bank Secrecy Act (BSA) The Uniform Law Commission ("ULC") and the American Law Institute ("ALI") have proposed certain amendments to the UCC in light of emerging technologies and the purchase and sale of digital assets. The amendments will need to be adopted on a state-by-state basis. New Article 12, will deal directly with the acquisition and disposition of interests (including security interests) in "controllable electronic records," which would include Bitcoin, Ether, and a variety of other digital assets. Amendments to Article 9 will provide further legal clarity on creating and perfecting security interests in digital currency. In addition, amended Article 8 serves to make clear that crypto assets can be "financial assets." UCC Amendments Cryptoassets & Insolvency Note: The information in this section is a selective and non-exhaustive summary of existing regulation and regulatory proposals/initiatives in the U.S.