Issue link: https://digital.shearman.com/i/1479657
U.S. Regulation of Cryptoassets (cont.) 37 In the absence of an overriding federal framework, various individual states have exercised jurisdiction over cryptoasset trading and other activity. New York, for example, has adopted the "Bitlicense" regime that requires licensing of some virtual currency activity in New York. In addition, in New York and other states, some custodians and other market participants have become licensed as trust companies subject to regulation by state banking authorities. Other market participants may be subject to state money transmitter regulations. States may also seek to enforce state securities laws against some market activity. State Regulation of Cryptoasset Activity Cryptoassets & Insolvency There is not, as yet, an overriding federal regulatory regime applicable to cryptoassets generally, and a number of federal agencies may have jurisdiction under existing law depending on the particular activity. The CFTC has determined that certain cryptocurrencies should be treated as commodities for purposes of the U.S. federal commodities laws. As such, derivatives involving such cryptocurrencies are subject to regulation by the CFTC. Although the CFTC does not generally regulate spot transactions in commodities, such transactions are subject to prohibitions on fraud and manipulation under the commodities laws. In addition, leveraged spot transactions involving retail market participants may also be subject to CFTC regulation. SEC commissioners and staff members have stated the view that many cryptocurrencies and other cryptoassets (excluding certain cryptocurrencies such as Bitcoin) may be securities subject to the U.S. federal securities laws. In such case, offers and sales of such cryptocurrencies or cryptoassets may only be made pursuant to registration or an applicable exemption. Exchange and intermediaries that deal in such assets may also be subject to registration and other requirements under the securities laws. Federal Regulation of Cryptoasset Trading Activity