By: John ReVeal and Jennifer Crowder On May 21, the South Carolina Governor signed a Bill to enact the Earned Wage Access Services Act (the Act), joining Kansas, Missouri, Nevada and Wisconsin as the fifth state to codify earned wage access (EWA) services. Many other states are considering such legislation, while a few others have so far relied on regulatory opinions or guidance. The Act, which will take effect six months after the Governor’s signature, will require providers of EWA services to register with South Carolina, renew the registration on an annual basis, and maintain a surety bond ..read more

By: Dr. Jan Boeing and Tanner Wonnacott MiCA Update The Regulation on Markets in Crypto-assets (MiCA)1 is part of the European Commission’s Digital Finance Package of September 2020, which includes other regulatory initiatives, such as the Pilot Regime for market infrastructures based on distributed ledger technology2 and the Digital Operational Resilience Act (DORA).3 MiCA will apply: First, as of 30 June 2024, regarding asset-referenced tokens (ART) and e-money tokens (EMT); and Second, as of 30 December 2024, for all other matters, in particular regarding crypto-asset service providers (CA ..read more

By: Daniel Knight and Kithmin Ranamukhaarachchi The Australian Attorney-General’s Department (Department) has released five papers outlining proposals for extensive reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime. This post is the first in a series of posts about these reforms. We start with proposals impacting remittance service providers, as outlined in Paper 4: Further information for digital currency exchange providers (DCEPs), remittance service providers and financial institutions (Paper 4) (see here). The application of the definition of “de ..read more

By: Jeremy McLaughlin and Chelsie Rimel The Consumer Financial Protection Bureau (CFPB or Bureau) released a new report spotlighting common consumer complaints for credit card rewards programs. The Bureau and its Director, Rohit Chopra, have been focused on payments oversight, including by proposing a rule last Fall that would apply to nonbank entities that provide digital wallets. The new report discusses the relationship between consumers and the providers of reward programs, and it stresses the need for fairness and transparency. Rewards programs have grown in popularity in r ..read more

By: Jeremy McLaughlin and Joshua Durham Based on a new statement of policy (“Statement”) issued on 20 April 2024 by Pennsylvania’s Department of Banking and Securities (“Department”), effective 15 October 2024, the Department will include virtual currency in the definition of “money” for purposes of the state’s money transmission law (“Law”). Previously, in January 2019, the Department had issued guidance concluding the opposite, that only fiat currency constituted “money” under the Law. The Department’s about-face follows other state regulators that have increasingly concluded that virtual cu ..read more

By: Dan Knight and Ben Kneebush On 12 March 2024, the Australian Treasury released for consultation an exposure draft legislative package that proposes to amend the current regulatory framework to regulate low cost credit contracts (LCCCs), including Buy Now Pay Later (BNPL) arrangements and other types of credit contracts. These changes are designed to be flexible, adaptable and proportionate to the risk of consumer harm. The package includes the draft bill and is accompanied by various explanatory materials. Together, the exposure draft legislative package: Brings LCCCs Into the Existing Re ..read more

By: Jay Lee and Anson Chan Earlier this year, the US Securities and Exchange Commission approved 11 spot Bitcoin ETFs. In Hong Kong, in view of rapid developments of virtual asset (VA) products and growing investment products offering exposure to VAs, the Securities and Futures Commission (SFC) issued a circular, on 22 December 2023, detailing requirements for investment funds with exposure of more than 10% of net asset value (NAV) to VA seeking authorization for public offerings in Hong Kong (Circular). The Circular expands the range of “retail VA products” substantially and supersedes a circ ..read more

By: Jeremy McLaughlin and Joshua Durham Hawaii has long been a thorn in the side of crypto companies. That thorn has finally been removed: on 25 January 2024, the Hawaii Department of Commerce and Consumer Affairs issued a press release summarizing its findings on the proper regulatory framework for cryptocurrency—its conclusion is that it will not apply the state’s money transmitter law to cryptocurrency activities. Hawaii initially worked with cryptocurrency companies to create an alternative licensing framework, but was ultimately unable to conceive of an adequate digital asset license. A l ..read more

By: Jay Lee and Beatrice Wun In our previous blog, we discussed the Hong Kong Securities and Futures Commission (SFC)’s position on the taxonomy of tokenized securities and digital securities, and whether tokenized securities will be regarded as “complex products”. In this blog, we explore the guidance set forth in the SFC’s circular on intermediaries engaging in tokenized securities-related activities (the Circular). Responsibilities of Intermediaries Intermediaries engaging in tokenized securities-related activities, such as (i) issuance of tokenized securities, or (ii) dealing in, advising ..read more

By: Nicolet-Serra and Josh Durham Singapore has just become the 48th nation (joining the US) to begin implementing the international Crypto-Asset Reporting Framework (CARF), which is intended to standardize the automatic exchange of personal financial information between countries and to reduce tax evasion by those engaging in  cryptocurrency transactions. The Organization for Economic Cooperation and Development provided the framework for CARF in August 2022, which defined “Crypto-Assets” and key intermediaries and other service providers that will be subject to reporting. Under the fram ..read more