Regulation Roundup

Across The Crypto Legal Bow, Lawsuits

FSB Eyes Crypto Regulation

And now begin the lawsuits.

The regulators have been looking at cryptocurrency operators – and in the United States, at least, are firing shots across the regulatory bow.

In the latest sign of regulatory action in the virtual currency realm, the Commodity Futures Trading Commission has filed suits against three virtual currency operators, with allegations that the trio defrauded customers.

In addition, the regulator charged, the three operators broke laws governing commodity trading.

Earlier this week, the CFTC and the Securities and Exchange Commission issued a joint statement warning of risks tied to virtual currency operators, saying they would “continue to address violations and to bring actions to stop and prevent fraud in the offer and sale of digital instruments.”

The Treasury department’s financial crime unit is gearing up to battle money laundering across crypto platforms, gauging whether they have safeguards in place to prevent such activity, as was reported last week.

The suits come after a flurry of regulatory announcements spanning the globe.

For example, South Korea and China have set sights on their respective cryptocurrency markets. China has banned initial coin offerings, and as reported in this space earlier this month, official word from South Korea’s Blue House (the local equivalent of the White House) indicated there will be no ban on bitcoin trading in that country.

Traders? They seem unperturbed by the thought, and seem determined to skirt whatever the government throws at them – looking, then, to foreign countries in which to trade cryptos.

In March, Germany and France will look to put forth jointly-authored regulatory proposals at the G20 meeting.


In the States, yet again, the Consumer Financial Protection Bureau was the center of at least some attention in the press. And Mick Mulvaney, the acting director of the Bureau, has held off on asking for funding from the government, opting instead to tap into an already extant “rainy day fund” before requesting more money. Of the $177 million in the fund, $145 million will be earmarked for CFPB expenses.

Also here in the U.S., it looks like financial regulatory relief legislation might be on the back burner, as an economist for Vice President Mike Pence has warned. Mark Calabria, the economist, said that other bills might make their way to Congress ahead of that bipartisan bill. The legislation would include, among other things, reforms aimed at easing restrictions on mid-sized and community banks.


It may be too early to tell just what the impact of PSD2 and Open Banking might be. We noted last week that the changes, of course, will be far-reaching. Reuters reported late last week that Goldman Sachs analysts expect more M&A deals in the digital payments space, with secular drivers in place, such as a shift away from cash. But there may be other drivers, too, as in the past, Morgan Stanley has said that the new rules may also spur deal-making.

Following up on earlier comments in this space on PSD2, Steve Kirsch, CEO and founder of Token, told PYMNTS that “as the banking APIs go live this year, third parties will be enabled to leverage open banking in creative ways, enabling customers to benefit from the movement toward integrated payments.

“We predict a particular update within the B2B payments landscape, as corporations look to push toward faster integrated payments, impacting strategic business financial planning and operational aspects.”

The going may be a bit slow, said the executive, as “although many banks have taken the first steps toward open banking, as outlined in PSD2, most have only gone as far as they need to comply with the legislation – and most have delays in their implementation plans, therefore delaying opportunities to improve their services and gain first-mover status.”



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.